Three years on, not much has changed in the lives of Harris and Ronson, the two self-made entrepreneurs. Mr Ronson is still suffering financially and only his bankers are keeping his virtually bust property empire afloat. Sir Philip, whose quiet manner and bank-clerk looks belie a steely determination, is on the up and up. This week Carpetright, his second go at building a carpet empire, heads closer to a stock market flotation which is likely to value the 117-shop chain at some pounds 70m.
The flotation will be yet another demonstration of Sir Philip's staying power. Sir Ralph Halpern, George Davies, Gerald Ratner - the star retailers of the 1980s - came and went, their business reputations battered, their private lives a sharp contrast to Sir Philip's, happily married to Pauline for 33 years.
Controversially involved in the Debenhams takeover and the row over preferential allocation of shares in the British Telecom privatisation, Sir Philip also emerged unscathed from the financial scandals that so cruelly engulfed his friends, Mr Ronson and the stockbroker Tony Parnes.
Sir Philip, meanwhile, sold out of one empire and began building another. In 1988, with miraculous timing, he sold his stake in Harris Queensway to James Gulliver's infamous buy-in shortly before the recession blew through the high street. Sir Philip left with pounds 70m more cash to add to the pile he had made in 30 years of turning a three-shop chain into a giant but stumbling carpet and furniture group.
His comeback began almost before he left Harris Queensway. In the small hours of 6 July 1988, minutes before agreeing to the pounds 450m Gulliver buy-out, Sir Philip played a cool hand. Yes, he would go. But, no, he would not sign a no-competition clause with Lowndes Queensway, the renamed Harris Queensway. That was the start of Carpetright.
A few months of sailing his yacht around the Med was enough for Sir Philip. Within months he was back in the carpet business, opening one shop in Canning Town in east London, helped by pounds 1m in capital from MFI, the kitchens giant that now owns 20 per cent of Carpetright. The business expanded, but failed to make much money in the teeth of the decline in high-street spending. But Sir Philip, who controls 40 per cent via family trusts, turned the business around with the help of new capital from Natwest Ventures (the old Natwest County Bank helped to float Harris Queensway back in 1978) and by Phildrew Ventures, part of UBS, which each own 15 per cent.
The forthcoming flotation, well timed to tap the current appetite for new issues, should ensure that Sir Philip's backers turn each pounds 1m of original capital into around pounds 10m or so. The great survivor's second coming at only 50 should see his family stake valued at close to pounds 30m.
It represents another last laugh for Sir Philip. While he was sowing the seeds of Carpetright, Lowndes Queensway was falling apart. The carpet business performed reasonably but Sir Philip's earlier diversifications into furniture and electrical goods proved disastrous for the highly leveraged buy-in team. Gulliver had vastly overpaid for inheriting what one executive recalls was a mess - 'Cost controls were very loose, the furniture business was a shambles and we had questions over the value of stocks.'
Caveat emptor. Months before the buy-in the warning signs were all around. Sir Philip fired half his top management team and shocked the City by disclosing that profits were on the slide. In the event, Harris Queensway exited with profits of pounds 17m against earlier hopes of close to pounds 60m. Lowndes Queenway limped from one refinancing to another before going under just two years after Sir Philip had bowed out.
Ironically, about the only ones to benefit were the managers of Sir Philip's original carpet operation. They bought the business out, and today Carpetland is a significant high street competitor to Sir Philip's Carpetright.
The carpet king has been lucky but it has been a long hard slog from the bare lino in south London to his current Axminster lifestyle. On the early death of his father, the dyslexic teenager decided to take the three carpet shops he inherited and try to make a go of it, aided by his mother. She died a few years later. The boy expanded the business, adding shop after shop, and learned everything there is to know about his business. 'Philip is the best carpet merchant in Europe if not the world,' says a former employee.
In the process, he revolutionised selling carpets. To cut costs Sir Philip virtually invented the computerised carpet-cutting machine. An order is received, the machine reduces a huge roll bought from the manufacturer to the customer's size in seconds, and sends it off.
In 1978, some 20 years after he laid his first carpet, Sir Philip took Harris Queensway public. He owned the bulk of a business then capitalised at pounds 22m, and was a multi-millionaire at 36. It was a suitable reward for Sir Philip and his wife, Pauline, who helped him to build the business while bringing up four children.
Nobody would describe the couple as flashy, but they enjoy the comforts that money can bring. The big house, the fast cars, the yacht in the Med, the show-jumpers that went to the Olympics with David Broome aboard.
They are in many ways an archetypal Thatcherite couple who owe their titles to that other self-made scion of the high street - 'Only the Conservatives can deliver,' said Sir Philip shortly before the 1987 election.
But the Harrises do not advocate every tenet of hard-line Thatcherism. The couple, remembering their roots, show few signs of agreeing with Lady Thatcher that there is no such thing as society. They are ardent charity-givers, particularly to childrens' causes such as the NSPCC and Birthright. 'Philip has given away a large part of his fortune but he has not done it to get attention like some others,' says a former business associate. Sir Philip spends much of his time on fund-raising for hospitals in south-east London.
And he appears to have made remarkably few enemies on the way up. Even a senior executive he fired says: 'He is one of the most likeable people you could wish to meet. He also does not lack moral or human courage. When he fired me he did it man-to-man, face-to-face, not via an inter-office memo.'
But Sir Philip is not averse to cutting corners in the Square Mile as well as carpets in the high street. When he made his carpet joke to Gerald Ronson he owed the Heron boss a favour or two.
During the British Telecom privatisation Mr Ronson helped Sir Philip to make a huge instant profit on selling 237,500 shares at a time when ordinary punters were restricted to a top limit of 800 shares. Heron's insurance subsidiary had received a guaranteed allocation for underwriting the deal, and Mr Ronson passed some of the cream over to Sir Philip. Both men denied any wrongdoing, and after long investigation the authorities took no action.
A few months later, during Sir Ralph Halpern's bitterly contested pounds 560m takeover of Debenhams, the duo were once again ensnared in controversy. Between them, Mr Ronson and Sir Philip controlled a crucial stake in Debenhams, which had trading links with the old Harris Queensway, and at the final minute they swung the shares to help Burton to victory. The City was amazed, since Ronson could not stand Halpern.
Three years later the DTI probed the circumstances of Burton's victory but, after a confidential inquiry, took no futher action. Sir Philip said he had not received any fees for services to Burton. Sir Ralph observed gratefully that after the takeover he renegotiated Debenham's existing deal with Harris Queensway, moving most of Sir Philip's selling space 'to the top of the shop'.
But the big question mark over Sir Philip and Carpetright is whether an excellent hands-on owner-manager has this time round put in place a management structure that can work. Derek Hunt, the MFI boss, recently stepped down and Sir Philip has taken on the role of Carpetright chairman as well as chief executive, which will make him few friends among City institutions.
'He is an intuitive business genius but he ran Harris Queensway like a court, not like a public company,' says a close observer. 'When a business grows you can't write all the cheques and you can't visit every shop every weekend,' comments a former colleague. 'When you get big it's all about managing people not about managing carpets.'
The jury is out on this. But remarkably, even those who criticise Sir Philip agree on the forthcoming share offer of Carpetright. They will buy the shares on day one. But some foresee selling after a year or so just in case Sir Philip Mark Two begins to look like Mark One, where many shareholders missed the sell-by date.