Gerald Ratner is back in business and determined not to blow it, he tells John Walsh
Not 15 minutes' jog from the centre of Henley-on-Thames, a selection of the town's most grimly aerobic citizens are pounding along electrified treadmills in a gymnasium. Mostly representing the final three of Shakespeare's Ages of Man, they are fantastically garlanded with sweatbands, eyeshades and baggy shorts. Because treadmill-running is perhaps the second most boring enterprise in the world (after watching the Millennium Dome being built), the athletes are being entertained by large TV screens that bring restful videos and world news to their sweat-filmed gaze. On one screen, an unhealthy-looking Boris Yeltsin is making a point with fat finger upraised. On another, an unhealthy-looking Michael Howard is apoplectically slagging off the Foreign Secretary. Both look as if they could do with an afternoon in The Workshop. Elsewhere, a couple of moonlighting sales managers are straining at rowing machines, nobody is trying the fantastically complicated, use-all-your-limbs-simultaneously Skywalker machine, and a brace of thirtysomething young mothers are conducting a supine chat about The Full Monty in what seems to be a pelvic- floor exerciser.

Gerald Ratner surveys his new kingdom with his habitual Eeyorish gloom. "A lot of people work out at a rate that's well below their heart-lungs rate," he says severely. "So they're not burning off fat and not achieving anything. Like these people who swim 100 lengths a day and think they're marvellous, but they do it so slowly, and their heart is so used to it, they're not really doing any exercise, they're just wasting their time." You wonder for a moment if he's going to tap one of his pounding clients on the shoulder and upbraid him for sloth. But no, he will not do that. Right now, Mr Ratner needs all the clients he can get - clients who can afford to pay the gym's pounds 600 membership fee.

The Workshop opened for business in July last year. It is Ratner's brainchild and baby. It represents his resurrection as a businessman and, with luck, his salvation. Although he was, for a period, the nation's most famous businessman after Richard Branson, he has not actually started up a business from scratch before. And while his name used to be a synonym for discounted sparklers, piled high and sold cheap, at 2,000 outlets all over the country, this new venture is a single, high-quality, site-specific thing that needs over a thousand loyal adherents to make his fortune.

Getting the thing under way was a nail-biting time. He was messed around by gym suppliers, thwarted by stroppy builders and swimming pool constructors. He had rows with his partners, his wife, his managers, his catering staff. And it was all captured on camera by the unblinking eye of BBC2's Trouble at the Top documentary team, whose first programme, "Ratner Returns" goes out on Wednesday 18 February. Viewers can relish the spectacle of Mr Ratner being grilled about responsibility by his eight-year-old daughter Sarah, and, with the gym's launch party imminent, becoming frantic about the electrical cables poking out of the loo and the all-pervading smell of garlic in the bar. It's like watching Challenge Anneka, rewritten by Dostoevsky.

Most interestingly it presents a picture of the modern businessman as a grasping, sour, mendacious bully. In one scene, Ratner explains to a punter why it's a little warm in the gym. "I can't put the air conditioning on," he says, "because the floor will warp." To another he explains that he hasn't put it on "because it dries up your mouth". The truth is, they hadn't installed any air conditioning. Is it a white lie, a business fib, or worse? Elsewhere, there's a delicious scene in which Ratner and his partner Tony are negotiating with a London entrepreneur of environmentally friendly beauty products, a man full of New Age baloney about "mission statements" and "carrying the message". What, Ratner asks, will their discount be? "We're not a discount company," says the New Ager sleekly. "We believe that giving you our products to sell is the best gift of all." "Tell 'im our mission statement, Tony," Ratner rasps, "which is to make as much money as possible."

When we met, the bar/tearoom was full of children, and the only place that offered privacy was, perversely, the creche. Shrewdly reasoning that "Everything's geared to families these days", he bought a log cabin for pounds 4,000 and spent pounds 25,000 fitting it out with bathroom and play areas. It's where we now sit, two grown men gravely conversing about the world of commerce while perched on tiny green chairs which look as if they may at any moment be loudly reclaimed by Baby Bear. The problem, when you meet Ratner, is trying to decide whether or not you dislike the shameless hustler he purports to be, relentlessly positive, irritable about suggestions of failure. He is no Del Boy Trotter. He is a modest, inoffensive figure in a cableknit sweater and green corduroys, with a bald patch in his close- cropped black hair and a striking facial resemblance to Leonard Cohen, the miserable visionary. His sad hazel eyes radiate defensiveness and hurt, while his speech drops to an intense sullen whisper when confronted by things he doesn't want to talk about.

Which brings us to the main obstacle in meeting Mr Ratner, namely That Speech. For this article, I promised to confine all mention of his downfall to one paragraph, so: before an audience of businessmen at the Institute of Directors Convention at the Albert Hall on April 23, 1991, he made a small pleasantry. "It was a joke to make the speech more interesting. It was a dig at the people who say `Our products are so cheap because we cut out the middleman' or `... because we're the biggest' or `... because we go directly to this or that'. It's all bollocks, it's just advertising agency rigmarole. We all buy our stuff the same way. So I said: `How can we sell this [decanter] at such a low price? Because it is total crap.' It was just a joke that had nothing to do with what else I was saying." But it was amusingly supplemented by a remark about a pair of Ratner earrings costing 99p - "about the same as a Marks and Spencer prawn sandwich, and probably won't last as long". The world never let him forget it. Today, you feel that any mention of the words "speech" or "prawn" or "decanter" will bring him out in a rash. "Some people bring it up to be unpleasant, but I don't get upset any more. It's folklore. It's not going to get any worse or better. I said to a trainer in the gym today, `That woman over there really doesn't like me. She never says hello'. And he turned round and said, `She must've bought some of your jewellery'."

The company's fortunes went into a steep dive after the Albert Hall incident; its name was changed from Ratners to Signet, and Gerald resigned in November 1992. What galls him, five years later, is how firmly his downfall has eclipsed his achievement. The first Ratner shop was his grandfather's (est 1949) in Richmond, where he was born. His father Leslie (from St Albans; Ratner's mother is from Iraq) built up the firm, acquired more shops and went public in 1965. By the time Gerald was 16, the family home was in Regent's Park. Leslie came in to the firm at 21, as a humble shop assistant, "and I went through a period of rebellion, when I was completely irresponsible and didn't work. Then, when we went into deep loss and my father retired, I realised that my life wasn't going to go on being comfortable any longer unless I became innovative and tried to achieve something. And that's when I went to the other extreme and started working very hard, and came up with the concepts of price-cutting."

Ask Ratner what he thinks he's best at, and he'll say "marketing". It goes back to his childhood, and memories of being taken round the market in Petticoat Lane by his father. "It was all the selling. It was much more stimulating than being taken to the park and going on the swings. There'd be a load of plates, a great big display, the man throwing in a teapot, making jokes about his assistant - `You 'eard of Joe Loss? This is Dead Loss' - and shouting about `pounds 50 worth of stuff, but today I'm not asking pounds 25', and breaking a few plates for no reason. He'd have a whole crowd of poeple hanging on his words. God knows if he ever sold anything, but it really got to me, this whole brilliant, complicated scheme that he used to sell things. It needed a lot of intellect, and I'm always impressed with that." Ratner was likewise impressed by the estate agent who sold his house: "On the day it went on the market, he lined up four buyers outside - people who worked in his office - and they were saying, `Please, please, you gotta let me come in and see it'." He laughs in admiration. He likes wide-boy tactics. He himself never went to business school, never (he says) learned to read a balance sheet, never had much liking for accountants. But in applying the spirit of Petticoat Lane to the world of diamond tiaras, he woke up a complacent industry.

"Most jewellery shops were selling at very high margins," he recalls. "It was a tradition in the jewellery business, which has the highest margins of any trade except for opticians. Most people thought, with jewellery, the more expensive the better. I found that it was incredibly price-sensitive. The more we cut prices, the better we did." Taking over the business from his father in 1984, he expanded at a furious rate, slashed prices like a samurai in a docket factory, bought up H Samuel the jewellers and Salisbury's the handbag people, and turned a pounds 500,000 loss into a pounds 22m profit in three years. By 1987 his company owned 600 shops. He expanded into America. "We did half our business there. We owned Watches of Switzerland in Bond Street, opposite Asprey's. We sold 70 per cent of the Rolexes sold in this country. We were involved in every part of the jewellery business, but people assume that all I'm about is the Ratners chain and price-cutting." He shakes his head about the unfairness of having a public image.

When he left, did he get a big payoff? "I didn't get any payoff." What, none? Ratner looked cross. "I got a year's salary," he said, "which had just been reduced from pounds 600,000 to pounds 375,000, which was taxed, so I didn't walk away with a large cheque." Indeed not (one nods sympathetically), that certainly is a pathetic sum. In answer to the question he has grown bored answering, he spent the last five years preparing a comeback. For a period he accepted a job as consultant to the largest jewellery firm in France. "But the worst thing was learning the language," he says, his brow furrowed like a ploughed field. "This woman came over to my house three or four times a week, and taught me to say, `Oui... combien... croque monsieur ... cent francs... merci... une biere, s'il vous plait'." Thus armed with Business French, Ratner went to a board meeting in Paris, "where they all talked unbelievably fast. I think they were doing it just so I wouldn't understand. I found it very difficult to get on with the French." Making the crucial decision to stop rising at 4am for the Heathrow flight, the rush-hour traffic and the Metro crush was surprisingly easy. "I'd been thinking of running a health club all the time I was in France. I'd been working out ever since I left Ratners. And it's a nice business to be in. Not as financially rewarding as the French thing, but I chose the option that would be more enjoyable."

The rest is, of course, histoire. But one significant detail surfaced as we talked about his fitness regimen, his hour with a personal trainer every morning, his punishing workout. He seemed, I said, a bit obsessive. "Yeah, I do get a bit obsessive about anything I take up. That's why I have to be careful about hobbies." Such as? "Collecting paintings. I'm very keen on a guy called Atkinson Grimshaw. He painted these street scenes that take you back a hundred years in a way a book couldn't and a film can't. They're lovely - the little gas lamps in the street, the autumnal glow on the leaves. But I drove my wife totally nuts because the whole house was full of Grimshaws. She thought, `This is not decor'. I did a pilgrimage to Leeds and went to his house, I bought files and books, I was completely obsessive. I loved the whole thing. I was told it was a mistake to look back like that, it was nostalgic, but I didn't care."

His other obsession was gambling - horses, five-card stud parties into the night. "It got ridiculous. I had to pack that up. You could lose a few grand on one hand. But the point about gambling, John" - he leaned forward across the miniature green table, that suddenly resembled a tiny card table for Snap - "is that the fear of losing is probably more exciting than the joy of winning. And when I was making a lot of money, there was no point in gambling unless I stood to lose a load of money. There's no excitement otherwise." You mean, flirting with failure? "That is obviously my major thing. That's what I'm always accused of - that when I get everything right, I go and blow it. But I'm not going to blow this -" He gestured at the gymnasium, the pounds 3m gamble whose failure would bury him and whose success will save his life. And whatever you might have made hitherto of his touchiness, his fibs and his shameless salesmanship, you instinctively wish him well