Online return of the man who brought down Ratners

Eleven years on, jewellery boss attempts a comeback from his 'total crap' remark

Gerald Ratner is back. The man who was famously ousted from his jewellery empire after calling one of his products "total crap", is returning to the trade with an internet jewellery venture called Ratners-online. Mr Ratner is also staging a stock market comeback as Ratners Online, which will be reversed into a former Ofex-traded shell company, DPA Investments, in a £875,000 deal. The plan is to seek a new Ofex listing with a view to graduating to the Alternative Investment Market later.

Mr Ratner, 52, was in ebullient mood yesterday, even shrugging off the "crap" remark that led to his downfall 11 years ago. "I know the jewellery business very well," he said. "If I get the product right and the marketing right we'll make a success of it. I'd love to see the Ratners name up there as a jewellery company. After all, we did have half the market at one stage."

On the subject of his ill-fated remark, made at an Institute of Directors conference in April 1991, he said: "It was a hideous mistake and I've only got myself to blame for it. I'm not going to blame the press as so many other people do. But I've got to pick myself up and make as success of this venture now."

The comments still send a shiver down the spine, even 11 years after the event. Talking about satisfying the public's desire for cheap goods, Mr Ratner told delegates at the Royal Albert Hall: "We also do cut glass sherry decanters complete with six glasses on a silver plated tray that your butler can serve you drinks on, all for £4.95. People say, 'how can you sell this for such a low price?' I tell them, 'because it's total crap'."

He ended by telling the audience "we even sell a pair of earrings for under a pound, which is cheaper than a prawn sandwich from Marks & Spencers. But I have to say the earrings probably won't last as long." Mr Ratner later explained: "I was the last speaker of the day, after the Chancellor of the Exchequer, so I thought I would go on and wake them up."

As the controversy threatened to engulf the company, the business started to experience financial problems as a result of over-expansion and large debts built up during its 1980s acquisition binge.

Asked yesterday whether the Ratners name had been discredited by the saga, Mr Ratner said: "I'm going to turn it to my advantage now. If you've got a web site one of the major challenges is to get the hits. We thought about calling it something else. But if we'd called it The British Jewellery Company, it would not have had the same recognition. We will at least benefit from curiosity value."

Ratners Online is being guided back to the stock market by a small firm, Matrix Securities, which is seeking to raise £4m for the start-up. The business aims to under-cut high street prices with watches ranging from £40 to £300, for example.

Mr Ratner will be chief executive, with Theo Paphitis, the head of Rymans and Millwall Football Club, acting as chairman. Jurek Piasecki, the head of Goldsmiths, will be a non-executive director. Gary O'Brien, a former Ratners finance director, will be chief operating officer.

Goldsmiths, the high street jewellery chain, is providing warehouse space and delivery support. It will also operate a "returns" service for customers who want to take goods back. Mr Ratner is buying two of Goldsmiths websites, Frogz and VAT Free Jewellery, which will be incorporated into the Ratners-online site.

Mr Ratner hopes to have the business up and running by September, in plenty of time for the key Christmas selling season. The colourful entrepreneur will invest about £100,000 of his own money into the business. In return for this he will have a stake of around 10 per cent.

He says there are no plans to return to the high street with Ratners stores. "The beauty of the internet is that you can get market share quite quickly."

Asked why he was trying his hand again, knowing the old problems will be dredged up, Mr Ratner said: "I just think the time is right to go on the internet. It's building up a head of steam. And we'll be able to offer the public good products at good prices."

Mr Ratner claims he is looking forward to dealing again with the City. "I've got no problems with the City. I've always got on well there and I've already met up with a few familiar faces."

After the near collapse of the business his family had built up over the years, Mr Ratner tried to bounce back with a series of business ventures, not all of which were successful.

He was a consultant to a retail development at Tobacco Dock in Wapping, east London, which failed. He then set up a gym with Mr O'Brien. It was the subject of a hilarious fly-on-the wall television documentary as the business lurched from one problem to another.

However, Mr Ratner has had the last laugh, netting £3.7m from the sale of his healthclub, The Workshop.

He has kept fit by cycling. "I used to cycle to the health club each day, which was a 25-mile round trip. Some people would take anti-depressants after an experience like mine. I went cycling."

Analysts welcomed his return. Nick Bubb at SG Securities said: "Gerald's a colourful character and it's always nice to have people like that around."

Signet was less forthcoming. "We have no comment to make," a company spokesman said. Signet has tried to distance itself from its history, particular since dropping the Ratners name.

The company's web site does not mention how the business was started and even the references to Gerald Ratner are fleeting. The "crap" remark is nowhere to be seen.

BACK FROM THE BRINK HOW SIGNET TURNED DISASTER INTO SUCCESS

It wasn't just Gerald Ratner's unfortunate remarks about his company's products that led to the near-collapse of the business in the early 1990s. In truth the company was under financial strain due to a debt mountain that had been caused by its breakneck expansion.

In just a few years, Mr Ratner had snapped up H Samuel, Ernest Jones, Zales, Salisbury's and Watches of Switzerland. The business also expanded in the United States, taking over Sterling and Kays. On the way up Mr Ratner became one of the torch bearers of the 1980s retail boom, along with George Davies of Next, Sir Terence Conran at Habitat and Ralph Halpern at the Burton Group.

On the way down the company laboured under huge debts and a complicated shareholding structure. The appointment of Jim McAdam as chairman in 1992 stabilised the business and he laid the foundations for what has proved a remarkable turnaround. Under its new name of Signet, which it took in 1993, the company has again become a high street powerhouse.

The company now has a stock market value of £2.1bn and the shares have been one of the best performers in the retail sector over the past two years.

Signet stands just outside the FTSE100 index of Britain's leading shares and profits last year were £183m on sales of £1.6bn. Mr Ratner missed out on the share price revival. "I sold my shares just after I left in 1992," he said yesterday.

The group has retained its businesses in the US. Indeed they now account for more than 70 per cent of group sales and profits, a fact which gives Mr Ratner much pleasure. Indeed the company has continued to expand in America with the Jared chain of large out-of-town stores and last year's takeover of Marks & Morgan, a privately owned US chain.

Signet returned to the dividend list in 1999 and two years ago appointed an American, Terry Burman, as its new chief executive.

The company now has more than 1,000 stores in the US with 667 Kays and over 55 Jared outlets. It has more than 600 UK shops, with 442 branches of H Samuel and 184 of the slightly more upmarket Ernest Jones.

The last of the Ratners stores was closed in 1993, part of clear-out programme which saw the group close nearly 300 stores.