‘Doing a Ratner’ – 6 business publicity disasters
There are some damaging forms of publicity and joking statements that can be easily misinterpreted with catastrophic consequences. When a few words are taken out of context or their is a full blown PR blunder, businesses can experience extensive brand and reputation damage, which is sadly more important than product quality.
When someone makes such a business gaffe it is often referred to as “doing a Ratner.” The saying was made famous by Gerald Ratner the former chief executive of the major British jewellery company Ratners Group, whose off-hand comments about his products at a private conference caused the company’s near collapse
We have put together 6 of the worst publicity disasters that have damaged company profits and tainted reputations below:
1. Gerald Ratner – Ratner Jewellers
We couldn’t have a blog titled ‘doing a Ratner’ without mentioning the man that made the saying famous. In 1991 Gerald Ratner managed to wipe £500 million from the value of Ratner Jewellers with just one speech at a private conference. He said:
“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 say, because it’s total crap.”
He added that his stores’ earrings were “cheaper than an M&S prawn sandwich but probably wouldn’t last as long.” The high-street chain never recovered from this monumental publicity blunder. He had devoted 30 years to building the global jewellery business which was nearly wiped out overnight. Ratner resigned in November 1992 and the group changed its name to Signet Group in September 1993.
2. David Shepherd – Topman
In July 2001, Topman brand chief David Shepherd made the fundamental error of insulting their target market. In an off-the-cuff interview to trade magazine Menswear he described the Topman consumers as “Hooligans or whatever.” He went on to say; “Very few of our customers have to wear suits for work. They’ll be for his first interview or first court case.” Arcadia, which owns Topman defended Shepherd’s comments which they say were taken out of context. They suggested that their customers would not consider the word ‘hooligan’ as an insult. However, no amount of rectifying could stop the company shares falling 4.5% after the comment.
3. Matt Barrett – Barclays
The Barclays chief executive Matt Barrett broke business rule number one by criticising his company’s product. Giving evidence to a panel of MPs he shocked witnesses by suggesting that consumers should stay clear of the Barclaycard, because it was so expensive. He said:
“I do not borrow on credit cards. I have four young children. I give them advice not to pile up debts on their credit cards.”
4. Keith Cochrane -Stagecoach
The chief executive of Stagecoach showed how one offensive word about the consumer can see company shares nosedive. In US magazine Forbes Keith Cochrane allegedly compared US bus passengers to ‘riffraff.’ The company strongly denied the allegation but shares fell from 73p to 69p in a matter of days.
5. Allen Roses – GlaxoSmithKline
Speaking at a scientific meeting in London in 2003, vice president of GlaxoSmithKline Allen Roses admitted most drugs do not work. The former academic geneticist said that the majority of prescription drugs made by the likes of Glaxo do not work on most people who take them. He revealed that “the vast majority of drugs – more than 90% – only work in 30% or 50% of the people.” Well at least he was honest!
6. Ivan Seidenberg – Verizon
In April 2005 Verizon cell phones boss Ivan Seidenberg said that his phones didn’t work indoors. In an interview for the San Francisco Chronicle he said:
“Consumers have unrealistic expectations about a wireless service working everywhere. Why in the world would you think your (cell) phone would work in your house? The customer has come to expect so much. They want it to work in the elevator; they want it to work in the basement.”
In this bizarrely dismissive comment the CEO not only belittled his product but also manages to offend his consumers.
Learn from the mistakes of those made above to give you a head-start in the business and working world. The next time you want to write or talk about things that can affect you professionally, step back and think about who will see it and the whether you can live with the consequences. To you, it may be innocent, meaningless talk that should be taken as a joke, but taken out of context it could be easily misinterpreted. Remember to think before you Tweet!