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Gerald Ratner: How I rose to the top before the fall

28 October 2007

Gerald Ratner: How I rose to the top before the fall

IN the early 1980s, when I took over control of Ratners, the family jewellers chain, from my father, young professionals had spending power like never before. Our customers were getting younger and younger.

At my insistence, we took all the mystique out of buying jewellery and made our shops as welcoming as Marks & Spencer. Our posters screamed discounts and “3 for 2” offers just like the fashion shops, and we started playing music and replaced the chandeliers with modern light fittings.

Something had really changed in the jewellery market. Customers weren’t looking for heirlooms; they were thinking about what they would wear that night, and the primary consideration was price. Manufacturing methods were changing, too, so it was possible to stamp out earrings and pendants using far less gold.

We moved them to the front of the window and moved our diamond rings into the arcade windows. This might sound insignificant, but it was revolutionary: we were hiding our prestige items and flaunting our cheaper products. Our key shopping hours became Saturday afternoons, when in the past we had been closed.

In retailing, it’s amazing how quickly you can get results: you can make a decision on a Thursday, implement the changes by Saturday, and on Monday you can check the sales figures to see the results. We had been a loss-making company; now the City started to notice our sharp rise in sales and profits.

We opened 30 new stores in 1984 and 1985. The shops were rolled out with a McDonald’s approach – every shop had the same stock, the same lettering on the fascia.

I had people in the industry come up and tell me: “You have completely ruined your father’s business.” I just smiled at them and said: “That must be why sales are up 50%.”

H Samuel, the upmarket jeweller and our main rival, had spent a fortune bringing in all kinds of “experts”, yet their sales declined. I first realised how much trouble they were in when I visited our shop in Ballymena in Northern Ireland in the run-up to Christmas. The H Samuel shop was round the corner and I was curious to see it because I knew they had hired a big design consul-tancy to do their Christmas displays. As soon as I saw their window, I knew they were going to have a bad Christmas. They had stuck plastic icicles over the windows so that you couldn’t see the jewellery!

When I was a lot younger, I had learnt a valuable lesson in sales when I had gone to Petticoat Lane market. It didn’t really matter who had the best gear, it was the stallholders who shouted the loudest that got the most sales. If you compared Ratners’ windows with H Samuel’s windows, it was as if they were just whispering to their customers to come in while we were screaming from the top of our lungs...

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