Gerald Ratner: 'Why didn't I write a book before? It wouldn't have had a happy ending'

Gerald Ratner is upbeat. Three years since his return to the jewellery business, his wholesale and internet retail company, trading as Gerald Online, has broken even.

"We've been lucky," he says, "2003 turned out to be a good time to launch an online business selling direct to customers. I can't honestly tell you that I could have predicted the impact the internet would have on sales. If I could, I'd have expected more from us."

Analysts agree there are attractive opportunities for companies trading in the mid to upper end of the market and also in designer products. They conservatively estimate the UK jewellery and watch sector to be worth around £3.45bn a year, with lucrative margins to be made in home shopping.

In 2002, when Ratner started to trawl the City for funding for a new venture, there was little enthusiasm for online retailing.

"When we launched," he explains," the City believed the smart money was in business- to-business retailing and was dubious about direct online selling. I knew I needed an angle to get started again - that going down tried and tested routes was not going to make a fortune. I've always tried to be different and do the opposite of other retailers.

"As I couldn't use the Ratner name [the brand is owned by Signet, which took over his old company] or, at the time, raise the capital to buy a 'bricks and mortar' business, the internet and shopping channels seemed ideal places to start."

His strategy appears to have paid off. This year the management of Gerald Online - a joint venture with SB&T International, the Indian jewellery manufacturer and exporter - plan to extend the range with more high-quality items, including branded watches.

Ratner is equally excited about the prospect of celebrity endorsement for his products. "I'm having lunch with Anne Diamond's agent - though you must be sure to stress she hasn't signed," he says.

The consummate marketer, he knows only too well the importance of reputation in running a business. Sixteen years ago, light-hearted remarks made at an Institute of Directors convention about his company's "crap" sherry decanters were "to prove the defining marks in my career".

The resultant media melee and downturn in sales (accelerated by a recession) led to his dismissal in 1992 as chief executive of the former family firm, at which he had worked since the age of 16.

The scars are still evident. "I did offer to resign within 48 hours of that speech," he says, adding: "And I wish now I had, rather than stay around for another 18 months for everything to fall apart."

But he was soon back, showing the persistence and ingenuity that friends claim have been the hallmarks of his career.

After leaving Ratners, he raised the money to create a gym in Henley-on-Thames, Oxfordshire. He built the membership up to 2,500 and then sold the business in 2001 for £3.6m.

"I left Ratners broke," he recalls. "When you don't have money, raising funds and credit is a nightmare. It was only when I approached the seventh bank manager with 500 subscriptions from potential members that I could raise the capital to lease the site I'd earmarked for the gym."

There is an endearing frankness about Ratner and it is difficult to reconcile this with the picture once painted of him in the press as a piranha. Hindsight lends itself to the view that, brimming with confidence, he perhaps fell victim to the stereotype of the day, when it was fashionable to portray corporate business leaders as fat cats living off the excesses of the Eighties.

Ratner is philosophical, acknowledging: "Back then I courted the press assiduously. And if you live by the sword, you die by it. I made a huge mistake, which I regret, and have to live with that fact. The upside was I no longer had to brief City brokers and I got into the habit of cycling 28 miles per day."

Looking to the future, will his current venture float on the stock market? He does not discount the possibility, adding that it depends on SB&T's plans. "My partners saw this venture as an ideal opportunity to develop their business in the UK and are keen to expand along the lines we're going." Would he sell his stake? "That would depend if somebody made the right offer," he laughs.

And as walls of cash mount in private equity firms, what of speculation that he might buy the UK arm of Signet? "I haven't lost interest but I'm not holding my breath," he says. "We wrote to Signet and they rejected a meeting. But I think investors will eventually start to question why they are holding on to an underperforming business in the UK if they want to expand in the States."

Alongside steering Gerald Online, Ratner spends two nights a week giving speeches to management teams, stockbrokers and business-recovery experts. "I love doing them and get to meet lots of different people. It's also great therapy and cheaper than paying a psychiatrist, though my wife complains she never sees me," he says.

With a book deal in the wings and potential television work, he can see the irony in his current position. "It's interesting: while there is often an element of schadenfreude among the audience [at his speeches] and I'm not a billionaire success, I could only be doing these talks because I'm now seen as back-able. People often ask me, 'why didn't you write a book before?' And I reply, because it wouldn't have had a happy ending."

So with his 60th birthday coming up in two years' time, how would he like to be remembered? "I know how I'll be remembered: sadly, as 'doing a Ratner'" - a reference to that PR gaffe. "But what people forget is that before that speech, we had transformed a family company into a global business with sales of £1.2bn and profits of £121m. That's how I'd like 'a Ratner' to be remembered."

Biography: Gerald Ratner

BORN: 1 November 1949.

EDUCATION: Hendon County Grammar School.

CAREER:

1965: joined the family firm, Ratners.

1984-91: chairman and chief executive of Ratners.

1997: founded the Workshop health club. Sold in 2001.

2003: founded Gerald Online.