Doing a Ratner

Doing a Ratner is a British business phrase referring to a chief executive or a senior person of a company who criticises the company's products or disparages the customers, frequently with disastrous results for both the person and the company. Generally, the only "gain" is massive amounts of bad publicity in the media. The phrase refers to a speech by Gerald Ratner which almost ruined his company.

The Speech
Although widely regarded as "tacky", the Ratner shops and their wares were nevertheless extremely popular with the public, until Gerald Ratner made a speech at the Institute of Directors in April 1991. During the speech, he said:

He compounded this by going on to remark that some of the earrings were "cheaper than an M&S prawn sandwich but probably wouldn't last as long"

The speech was instantly seized upon by the media, an estimated £500 million (US$881 million in 1991) was wiped from the value of the company, he was removed from his position 18 months later, and in 1994 the Ratner name was expunged from the company, renamed Signet Group.

Even today, Ratner's gaffe is still famous in the British Retail industry as an example on the value of branding and image over quality. Such gaffes are now sometimes called Doing a Ratner, and Ratner himself has acquired the soubriquet "The Sultan of Bling". Ratner has said in his defence that it was a private function which he did not expect to be reported, and his remarks were not made seriously.

Other executives who have "done a Ratner"

* In July 2001, David Shepherd, then brand director of the clothing chain Topman said in a trade journal "Menswear", that his customers were hooligans and "Very few of our customers have to wear suits to work. They'll be for his first interview or first court case."

* In March 2002, Woolworths' Gerald Corbett said, regarding Woolworths' progress at his stores, that "Some city centre stores are vast open deserts with nobody there."

* In March 2003, EMI's chief executive, Alain Levy said the company had cut the artist roster in Finland from 49 artists, as he did not think there were that many people in the country "who could sing". The joke went down like a lead balloon over in Helsinki, with the managing director of EMI's local subsidiary pointing out that the Finnish firm commanded a 20% share of the local market thanks to Finns who can sing

* In October 2003, Matt Barrett, the chief executive of Barclays (owner of Barclaycard, one of Britain's most popular credit cards) said on a parliamentary Treasury committee on credit cards, "I do not borrow on credit cards. I have four young children. I give them advice not to pile up debts on their credit cards.".

* Anders Dahlvig, the chief executive of furniture store IKEA, said his stores were "appalling" on weekends.

* Freddy Shepherd and Douglas Hall, bosses of football club Newcastle United, said Geordie women were "dogs" and mocked fans for purchasing £50 replica football shirts that cost the club £5.

* In the United States, a Forest City Enterprises executive, developer Bruce Ratner, characterized his own Atlantic Center mall as "not something that we’re terribly proud of". Additionally, in May, 2004, he memorably insulted customers who live near the same mall to a NY Times reporter: "here you're in an urban area, you're next to projects, you've got tough kids,'.

* On 3 June 2007 in an interview in the Financial Times, Nicholas Ferguson, chairman of private equity firm SVG Capital, said that capital gains tax rules mean that many private equity executives "pay less tax than a cleaning lady". Media and political uproar ensued, and the asset class is now the subject of an ongoing investigation by a Treasury Select Committee into tax rules that see wealthy private equity executives pay 10% tax on carried interest, as opposed to the 40% income tax rate.

*On 13 September 2007, chief executive of the low-cost carrier Ryanair, Michael O'Leary, when asked what attracted him to the air transport industry, replied "Nothing. It's a stupid business, which generally loses a lot of money." In the same interview he said that it was likely he would stay as CEO of three or four years, rather than the one to two previously indicated.

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