Have you ever heard of the “Ratner effect”?
Well by the end of this post you will know what it means.
Gerald Ratner inherited his father’s jewellery business in 1984. Within six years he had turned a small retailer into a multimillion-dollar empire.
He made it so successful that it seemed every British high street had 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 and the place where working-class boys bought rings for working-class girls.
Life was going well for Ratner, expensive cars, houses, boats, women and he frequented many high society events and was rubbing shoulders with Margaret at Number 10.
Yes life was good until the fateful day when he was guest speaker at the Institute of Directors on April 23, 1991 attended by over 6000 business people and journalists.
For reasons only known to himself Ratner decided to undo not only his entire life but his empire in less than 10 seconds.
Asked how was it possible for his company to be selling a sherry decanter for the extraordinary price of £4.95 he answered, to the amazment 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 made a good 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 propbably 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 a matter of days.
Gerald lost his playboy lifestyle as well as his job and the company had to do a Phoenix and rename themselves ‘Signet Group’.
Some people say that any press is good press but on this occasion negative press was certainly not good for anyone so why did he do it? I doubt he intended to do it.
I recently found this video which summaries the rise and fall of Gerald Ratner and what’s he’s doing today. The video was posted on Youtube in 2015 some 24 years after his infamous speech. A billion dollar speech that sunk a major company. You may occasionally hear the term: “Doing a Ratner” which essentially is short for: really screwing up. Today, Ratner gives talks on how to deal with adversity and keep going. Making a mistake is not the end of the road all you have to do is get up and try again. Ratner is not the only famous person who’s made a gaffe. Helen Mirren recently did so and now there’s a new phase: Doing a Mirren.