Famous for four letters, gone for 11 years, but look who's back, tough as a diamond

Damned by his own decanter, Gerald Ratner is reborn as a cyberspace retailer. Abigail Townsend reports

here cannot be many people who do not know the name Gerald Ratner. It has, after all, taken on another meaning. Barclays chief executive Matt Barratt was the latest to "do a Ratner", for example, when he announced last month he would never borrow money on a credit card - because it was too expensive.

For the man himself - who 12 years ago called a decanter sold in his eponymous jewellery group "crap" and said a pair of pearl ear-rings cost less than a Marks & Spencer prawn sandwich and would probably last for less time - it has all become rather predictable. Ratner has set up his own retail business since then, the internet jeweller Gerald Online, and done a few other things besides. But he accepts that those throwaway remarks, for which he eventually lost his job, will never go away: "It is like being a naughty boy at school who gets the cane, and then, 12 years later, someone else does it and you get caned again."

He admits it was "daft" to say what he did but adds that he paid a heavy price. "It was my baby," he says of his life at Ratners, the family firm he joined aged 16 in 1965. "The chief executive of Barclays Bank, it's not his baby - he could well go on to do something else. But that was the only job I had ever had."

And that, even though he left in 1992, was much how it stayed until last month, when Gerald Online got off the ground. In between times, he set up a gym in Henley-upon-Thames in 1997 - though concedes that was hardly taxing compared to running a retail empire - provided consultancy services to a French company, got into music, spent time with his children and learnt how to put petrol in his car. (The first time he tried after leaving Ratners, and after years of being driven everywhere, he sprayed petrol across the forecourt.)

It means that Gerald Online, a venture that has been three years in the making, is a big move for Ratner. He is ambitious, though has no desire to return to his workaholic former life, and acknowledges the venture could well be his final role of the retailing dice. The 54-year-old says it would be "disappointing" for it not to succeed, adding: "I'm not getting any younger. This is my opportunity to get back into this on a reasonable scale."

The site offers a 600-strong range of jewellery and branded watches, aimed at the upper end of the mass market but undercutting high-street prices. Launched with the backing of bricks and mortar jeweller Goldsmiths, which has made space for the stock at its warehouses, customers are offered a 30-day guarantee and are able to take pieces back, or have them repaired and adjusted, at any Goldsmiths shop.

Ratner says the response so far has been impressive, touching around a million hits and average sales of £100,000 a week, way above the company's expectations. Demand for the more expensive items - prices range from £15 to £2,500 - is also higher than predicted and further supplies are being sourced frantically. Ratner was expecting a slower burn to start off with - "If I had one customer, I would have been delighted" - but concedes his own notoriety was likely to make people curious if nothing else.

Ratner, however, also has the fervour of the convert for internet shopping, particularly after going on to broadband at home a year ago. "You're saving a huge amount of money and that is what the internet is well known for. It's no good having the wrong stuff, but if you have the right stuff and it's cheap, you've made it."

Concerns that, for some shoppers, a purchase of jewellery can only be made in person are dismissed: "Everybody says jewellery is touchy-feely and you can't sell it over the internet. I don't know. They are selling it in America over the internet and they are selling it on QVC [the television shopping channel]."

He also loves cyberspace for giving him "a shop in every town overnight". Building up a similar chain of high-street stores would take years and, as he says, "I didn't want to be sitting behind the counter in one shop".

The idea was first mooted to Ratner by the chairman of Goldsmiths, Jurek Piasecki. He suggested he sell over the net because his media profile would ensure interest. Ratner, who by then had sold the Henley gym for £3.6m, agreed and set about trying to secure backing - just as the dot-com bubble burst in 2001. The second attempt to get the project off the ground, a year later, was scuppered by the old family firm. The original plan had been to call the site Ratners Online, get the City to put £4m into it, list on the Ofex market and then transfer it to the Alternative Investment Market.

The problem, which arguably he should have foreseen, was that the name Ratner was no longer his to use: the company, since renamed Signet, still owned the brand even it didn't trade under it, and refused to let him use it. He tried to fight Signet's decision but failed, by which time both the backing and the ambitious listing plans had fallen away. (He is still fighting Signet over accusations, strenuously denied by his former employer, that a rival buyer has threatened suppliers that it will take away Signet's business if they deal with Gerald Online.)

So, as Ratner himself admits, November's launch was third time lucky. With logistical support coming from Goldsmiths, the financial backing this time round is from an Indian jewellery manufacturer, SB&T International, which approached Ratner to get a toehold in the UK market. "The people I'm involved with are very ambitious," he says. "They really want to make this sizeable. They are not in it to make £50,000."

He concedes that an eventual listing is intended, but has no idea when, or indeed if, it will happen.

As chief executive of Gerald Online, Ratner has gathered a small but mixed team around him to run the business. The finance director is another former Ratners executive, Gary O'Brien, who was also a partner in the Henley gym. The two men have worked together for years. But experience isn't everything because Ratner has also appointed a 21-year-old unknown as a buyer. "I just felt he was bright."

Ultimately, though, the success of the site will depend largely on Ratner himself. As he says: "I am the one who's got to make it work. We have got to sell jewellery, that's all I care about."

His credentials are certainly sound, even though he does admit to be being "a bit rusty". He was a driving force behind Ratners' transformation into the world's biggest jewellery retailer before his ill-judged remarks temporarily turned off scores of customers. Signet, which owns H Samuel, Ernest Jones and has an extensive US presence, nearly went bust but now has recovered to have a market value of £1.8bn.

Christmas will be a crucial time for Gerald Online which, for all the smart design of the websites, is a million miles from the old image of Ratners. Research backs up Ratner's opinions on internet retailing: a recent report by Continental Research revealed that more than £10bn was spent online in the 12 months to September, nearly double the amount splashed out in the previous year. Only time will tell, however, if the public are happy to spend a portion of that on jewellery - or if they see geraldonline.com just as a novelty item to be forgotten as quickly as a prawn sandwich.