worse.^14 The company started to pursue a rationalization programme,
cutting costs in the pursuit of margins as well as volume, but still recorded
a first half loss.
The speech at the Institute of Directors
Gerald Ratner’s media flair and popularity proved invaluable in early
acquisitions, most crucially in the case of H. Samuel’s. On Tuesday 23 April
1991, however, he achieved what may have been a unique feat by getting
the Institute of Directors conference reported on the front page of theSun
newspaper, by describing one of his products as ‘total crap’. It was to cul-
minate, ultimately, in his downfall.
He proudly told the audience that the way to survive the recession was
to give the people what they wanted, ‘never mind the quality, buy in quan-
tity and have some cheap fun’. Cheap fun came in the form of silver ear-
rings at 99p which ‘have very little to do with quality, costing less than a
Marks & Spencer prawn sandwich and most probably not lasting as long’.
Another winner was an imitation open book with curled up corners and
‘genuine antique dust’. Gerald declared, cheerfully, that it was in ‘the worst
possible taste’ but it had already sold 250 000. He added:
We also do cut-glass sherry decanters complete with six glasses on a silver
tray your butler can serve you drinks on, all for £4.95. People say how can
you sell this for such a low price. I say because it is total crap ... Our Ratners
shops will never win any awards for design and they are not in the best pos-
sible taste. In fact, some people say they can’t even see the jewellery for all
the posters smothering the shop windows. But these shops, that everyone
has a good laugh about, take more money per square foot than any other
retailer in Europe, because we give the customer what they want.Reaction to the speech was mixed. The jewellery trade was in no doubt,
however, a scornful East London diamond trader insisted that Ratner
wasn’t a jeweller but a marketing man who didn’t understand the busi-
ness. ‘He had ripped the guts out of it, selling a commodity which might
just as well be onions.’ One customer, having just bought £50 of earrings,
was quoted^15 as saying, ‘It’s cheap and convenient. Knock him if you like,
but he’s made a bloody fortune.’ The City, initially, gave the same reaction.
The marketing director, Simon De Mille, hastily insisted that the
comment had been made with tongue firmly in cheek and that the media
had misinterpreted what were only gags. By the end of the month Gerald
Ratner, having received hundreds of letters (half in protest, half in
support), issued a formal apology for his comments: ‘My remarks were
meant as a joke and I would like to apologise for any offence they have
260 Relationship Marketing