Gerald Ratner is famous for building up a fortune in the jewellery business, and losing it all with a single speech. Here he talks about what the world of financial services can learn from his mistake, and explains why he cashed out his whole pension in one go.

Ratner Gerald

Your 1991 speech in which you referred to your products as “total crap” is still regarded as one of the biggest gaffes in business. What did you learn from your mistake?

Don’t take your reputation and brand for granted. It is extremely fragile. I lost everything – the business really dived in terms of sales and everything. We were heading for £200m profit that year and instead we lost £100m.

Reputation is something you can’t joke about. In my field, the difference between one jeweller and the next is nothing other than the reputation it has, so that has to be very carefully nurtured.

Once you have lost that confidence, what are the first steps you take to regaining it?

Funnily enough I was asked in by Volkswagen to discuss this, and what I said to them was “even though you feel, as I did, that the press are being disingenuous, and that it’s not completely your own fault, and there are mitigating circumstances, there is absolutely no point in going down that road”.

It does stick in your throat, but you have to put your hands up and say “it’s completely my fault and I’m very sorry about it, and we’ll put it right”. Customers can accept that people make mistakes. What they can’t take is “it’s not really my fault”. That’s everyone’s first reaction when something goes wrong – denial. But it’s no good doing that. You have to admit it was your fault and be very humble and apologetic – annoyingly, but that’s what you have to do.

How do you think financial institutions have dealt with recent scandals?

There is a general feeling that the establishment has let us down – all the people who were looking after our affairs have made lots of money at our expense and we cannot trust these big banks and companies because every day there is another horror story that points to the fact they’ve let us down.

You get this advertising you see from the banks where everybody is trying to be Mr Nice Guy and it doesn’t really wash. But there should be a certain amount of acceptance of the way they are seen by now, and instead of trying to fight that, which is just peeing against the wind, they need to take a more indirect approach.

Presumably that is a long, drawn out process?

As I said to Volkswagen the only way you are going to rebuild trust is to move on and try and get off that subject – just carry on building brilliant cars, and get the plaudits for that. If you look back at David Beckham in 1998 he was the most unpopular man in England, but now he is the most popular. He never said he was unlucky to get sent off against Argentina or anything like that, he just got good at what he does. People do respect organisations or individuals that are good at what they do. It’s no good trying to fight an argument in a territory that you can’t win.

What about the world of pensions in particular - how do you view pensions?

I’m fed up with my pension. I reached 65 this year and I just cashed it in and paid the higher rate of tax. When George Osborne said I could do it I thought “great”.

The whole lot?

Yep. My friends all said I was mad, but I was fed up with it. I’ve invested in property and it’s already gone up, and I’m in charge. Alright, I lost 45% on day one but at least I can do what I like with it.