Stories from the book – Gerald Ratner and the Need to Pause

When you’ve been through trauma – whether that’s bereavement or divorce or public humiliation – there’s something to be said for just taking the time to cool down.[i] (Gerald Ratner)

 Gerald Ratner writes that cooling down and taking time out was foreign to his nature. He was an action man. In the years after April 1991, however, he had no choice.

Gerald Ratner had taken a relatively small family jewellery business and, by dint of passion and incredibly hard work, turned it into the United Kingdom’s leading jewellery retailer. Annual profits for 1990 were £130 million and among Ratner’s 2,000 stores were 500 recently acquired on the west coast of the United States. Gerald Ratner was in the only job he had ever wanted, a millionaire master of the universe. Yet, for all of his business acumen, experience, and smarts, Ratner made a single mistake that would cost him almost everything.

On 23 April, 1991, Ratner stepped onto the stage to give a speech to 4,000 of the UK’s most influential businesspeople at the conference of the Institute of Company Directors. He was at the top of his game, and was scheduled to share the stage with future British Prime Minister John Major and former South African President FW de Klerk. Ratner was a confident speaker, known for adding humour and pithy pieces of advice to make his speeches more memorable. On this occasion, however, Ratner delivered one joke too many. A tabloid journalist scribbled down Ratner’s comment that the reason his stores could sell a sherry decanter with six glasses in a presentation box for £9.95 was because “it was crap”.[ii] The newspapers had a field day. Ratner’s comment became national news, even shifting Princess Diana from her traditional spot on the front page. Ratner’s was rechristened as “Rotners” and Gerald Ratner quoted as telling his customers that, “I’m selling total crap.”

Already facing the start of an economic recession, Ratner’s was forced to close stores. Soon after, his board forced him to resign. Despite having spent 18 months working like crazy to save the business, the name Ratner had become an embarrassment, both to Gerald Ratner and his organisation. At the age of 43, having watched the value of his personal shareholdings shrink from £8 million to £100,000, Ratner was washed up.

The phone didn’t ring for Gerald Ratner. For years, there were no opportunities to recover and begin to regain his self-confidence. To pass the time, his wife sent him out on family errands. While new business possibilities began to emerge several years later, Ratner faced a long period of self-questioning and torment before anything like career recovery began.

During these years, he learnt for the first time what it truly meant to develop relationships with his (second) wife and children. He started to get fit, riding a bicycle through the English countryside, rebuilding his physical and mental fitness. On reflection, these tough years were years well spent,

“What I now call my ‘wilderness years’ gave me a chance to recuperate. I really believe now that if you’ve been through a terrible experience, you have to get your head straight before you can do anything else…You can’t recover from a failed business – and all the pain that places on every part of your life – overnight.”[iii]

Gerald Ratner paused in order to progress. He’d lost his fortune, his business, his job, and his reputation. He’d become known as Mr Crapner. He, more than most, would agree that “sh** happens”. In coming back, however, he got through a critical period that the vast majority of people would prefer to avoid, namely pausing long enough to understand what had really happened.

Our keep-moving culture strongly discourages stopping. After all, no one who stops can win a race, can they? While we know that the roses might indeed smell nice, pausing to smell them while the world moves on without us is unacceptable, isn’t it? By definition, pausing or stopping mean that we will lose “the big mo’”, momentum.

To stop means to die, doesn’t it?

I don’t think so. To pause is to progress.

[ii] Ratner, p.148.

[iii] Ratner, p.242.