The Man Who Destroyed His Multimillion Dollar Company in 10 Seconds

Have you ever heard of the “Ratner effect”?

By the end of this post, you will know what it means.

Gerald Ratner inherited his father’s jewellery business in 1984. He had turned a small retailer into a multimillion-dollar empire within six years.

He made it so successful that every British high street seemed to have a Ratner’s store or one of the associated companies he had brought up.

People loved his store because it offered affordable products to the working class. In fact, it was generally known as the place where working-class boys bought rings for working-class girls.

Life was going well for Ratner, who had expensive cars, houses, boats, and women. He frequented many high society events and rubbed shoulders with Margaret at Number 10.

That Fateful Day

Yes, life was good until the fateful day he was a guest speaker at the Institute of Directors on April 23, 1991, attended by over 6000 business people and journalists.

Ratner decided to undo his entire life and empire in less than 10 seconds for reasons only known to himself.

Asked how his company could be selling a sherry decanter for the fantastic price of £4.95, he answered, to the amazement of his audience and his shareholders, the following:

“How can you sell this for such a low price?” I say, “Because it’s total crap.”

To make sure that he really did an excellent job of it, he also stated that his company:

sold a pair of earrings for under a pound, which is cheaper than a shrimp sandwich from Marks and Spencer, but probably wouldn’t last as long.

As you can guess, the media had a field day with this and ran the story so many times that any working-class boy buying his working-class girlfriend ‘crap’ from Ratners would not be “getting lucky tonight’.

Additionally, the company’s shares dropped £500 million in days.

Gerald lost his playboy lifestyle and job, and the company had to do a Phoenix and rename themselves ‘Signet Group’.

Some people say that any press is good, but on this occasion, the negative media was unsuitable for anyone, so why did he do it? I doubt he intended to do it.

Philosophical

Today, Ratner continues to talk about how to deal with adversity and keep going. Making a mistake is not the end of the road unless you want it to be. All you have to do is get up and try again.

Gerald Ratner’s infamous video, in which he jokes about the quality of his company’s products, has been widely circulated in the media for years.

However, in a recent interview, Ratner reflected on the incident and put it into perspective. While the mistake did lead to the downfall of his business, he acknowledged that there are far worse examples of failure that have resulted in much more severe consequences, such as the loss of lives.

Gerald is now in his 70s, and he has not retired. He is still on the speaker circuit, earning £4000+ for each speaking engagement.

Additionally, Gerald mentors retail businesses, and who won’t want him? His wisdom is priceless! For example, here is Gerald’s advice for shops with no customers: If your store has no customers, put your coat on and pretend to be a customer! He is also wary of retail businesses run by accountants, saying that those run by accountants are sure to fail.

Unfortunately, Ratner is not the only famous person who’s made a gaffe, and his sense of humour still gets him into trouble today.

Ratner’s infamous blunder is just one example of many in which individuals have made grave errors in judgment. Celebrities have also made grave errors with off-the-cuff comments, such as when actress Helen Mirren publicly expressed her scepticism about the effectiveness of moisturizers while representing a well-known cosmetics brand.

You can now get many search results on the keywords: Doing a Mirren or doing a Ratner, which essentially is short for really screwing up.

Despite these missteps, it’s important to remember that mistakes are a natural part of the learning process and can ultimately lead to growth and improvement.



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