Theo Paphitis – The King of Retail
Making Money Magazine, May 2018
From tea boy to selling stationery, multi-millionaire retail magnate and former Dragons’ Den investor, Theo Paphitis, talks to Angela Sara West about his success secrets, his business tips and how YOU too can make your business dream come true.
Having left school at 16 without qualifications, Theo Paphitis has always had an entrepreneurial spirit. “Being dyslexic, I constantly found different ways to create solutions and that has stood me in good stead ever since,” he tells me. “I always worked hard and had an eye for opportunity, such as running a school tuck shop when I was 14 years-old.”
As one of the country’s most successful entrepreneurs, his defining work moment was moving from his job as an office boy for a Lloyds of London broker to work for Watches of Switzerland on Bond Street, where he discovered his passion for retail. “I realised the power of a good salesperson and, crucially, what a rewarding and passionate sector retail is. I’ve never looked back!”
At 23, the natural salesman started his own business in commercial finance and went on to revive the fortunes of notable high street names. In his former role as Chairman of Millwall FC, he took the club out of administration into the FA Cup Final and Europe.
In 2015, the self-confessed “shopkeeper” launched the Theo Paphitis Retail Group, comprising Ryman Stationery, ironmongers Robert Dyas and multi-award-winning global lingerie brand, Boux Avenue. He recently sold Red Letter Days, which he co-owned with fellow ‘Dragon’, Peter Jones, while his latest acquisition is the London Graphic Centre.
A simple kiss…
The Cypriot-born businessman’s phenomenally-successful business ventures are all privately owned and “entrepreneurial in spirit” and, owning multiple businesses around the globe, Theo’s constantly on the road. “But I have a driver, so I can work on-the-go! I use my car as a second office.”
His success is built on keeping it simple and working hard. “I truly believe in the saying ‘the harder you work, the luckier you get.’ I’ve always done my homework, worked on knowing more than my competitors and used my common sense. The answer is in a KISS (Keep It Simple Stupid)!”
His worst career gaffe? “Buying a T-shirt design company called Splash early on in my career. After I had acquired it by raising £5m via a rights issue, the share price collapsed and I couldn’t raise any cash to pay back debts due to Black Monday. After struggling to save the company, it didn’t work and I was booted out. I took six months off to rethink what I was doing, but it made me realise that often your first mistake is your best one, because you can only learn from it.”
What’s at the heart of the retail king’s businesses? “Customer service, customer service, customer service… and passion.” He says his companies thrive because they understand their customers. “Most importantly, if you look after your colleagues then they, in turn, will make sure your customers are looked after, so everyone is happy.” Robert Dyas and Ryman both have a fantastic heritage story and a strong history of looking after our customers. I launched Boux Avenue from scratch, in-store and online, and it now has nearly 30 stores in the UK and more internationally.”
Going back to Ryman’s roots… The importance of incentives
Theo continues Ryman’s historic ethos of staff welfare schemes. A highlight is the annual incentive holiday he provides for his store managers across his four brands. “If they hit target, they get to come away for five nights on a five-star trip to fantastic destinations such as Barbados, Croatia, Greece, Spain and Malta. It gives me a chance to spend time with our hard-working colleagues and it’s a time for them to be rewarded, let their hair down and have some fun!”
Exit the Dragon…
As a straight-talking stalwart on BBC’s Dragons’ Den, Theo invested in numerous small businesses in a wide variety of industries. He says of his time on the show “as soon as I realised that a good person with an average idea is a better bet than an average person with a great idea, I didn’t look back. Alarm bells ring when I see and hear a lack of detail in a pitch. If you haven’t prepared properly for a meeting that could make or break your business… you don’t deserve to be there.”
He says the decision to leave the show in 2012, to focus on his expanding retail empire was not an easy one, but the time was right to surrender his seat.
Brexit – the “perfect storm”
Does he think businesses need more support? “There is a huge amount of opportunity for businesses out there from many sources, but people can always do more. The government needs to support bricks-and-mortar businesses, as well as digital-only operations, to level the playing field for the likes of business rates and give them a fighting chance. It’s tough out there at the moment, as retail faces a perfect storm, but retailers will move forward through adapting to, and being part of, the change. Do not be surprised to see many names disappearing from our landscape, as well as new names coming through.”
As an admirer of people who have passion and energy, the small business champion has been running the weekly ‘Small Business Sunday’ Twitter competition, known as #SBS, since 2010.
Each week, hundreds of business pitch their ideas to Theo and on a Monday evening, he picks six to retweet to his half a million followers. The #SBS community now has over 2300 businesses who all support and network with each other. The highlight of the year is the free event where hundreds of them get together for a day of advice, networking and a picture with Theo!
Theo stresses the importance of being social media savvy. “In this day and age it’s essential, as one wrong tweet can be a gamechanger now for careers and businesses, so you have to be clear what you are saying, to whom and, most importantly, why!”
As a public figure, does he worry about criticism that comes his way and how it can affect his businesses? “I’m quite thick skinned and, as I often say it as I see it, there will inevitably be those who oppose my views, as well as those who agree with them. That’s the beauty of freedom of speech and the importance of having a debate to get to the bottom of issues. I will always respect the views of others, but equally ask for my views to be respected accordingly.”
Inspiration, inspiration, inspiration
What drives this unstoppable businessman? “Inspiration and motivation isn’t so much from the people I’ve met, it’s more how they show their passion for what they’re doing and how they get off their bums to do it! If people care and are working hard, it makes me sit up and take notice and I find that quality very inspiring in people.”
Where else does he head for inspiration? “Usually the shower… it’s good thinking time! Failing that, I get myself out of the office and into the stores for inspiration. New experiences, at home and abroad, also help.”
When it’s time for R&R, this busy shopkeeper finds it difficult to shut up shop. “I’m not very good at relaxing, as I like to keep busy. I find lots of ways to enjoy and challenge myself as switching off doesn’t interest me. I’ve taken up racing cars, which possibly isn’t the most relaxing thing I could do, but I’m a great believer that you should do something scary every day!”
So, how does he like to recharge his batteries? “I head for sunshine and water, where I feel alive. Must be that island upbringing!”
The book on his nightstand right now? “I’ve just finished Fire & Fury by Michael Wolf, about President Trump.”
Pursuing the dream
The tycoon says the best thing about being an entrepreneur is the freedom. “It’s about doing what you love… every day. I love retail and wake up every day with a sense of purpose from working in a vibrant industry with passionate, hard-working people. Life is too short to do something you don’t enjoy. You spend a huge amount of time at work… do what lights that fire in your belly!”
He says without having dreams, you cannot be successful in business, and it’s how you turn those dreams into reality that is key. “Your dream will only work if you live and breathe it and are passionate about it. Making £100m is easy; it’s making your first £1m that is difficult. Most importantly, if you believe in your idea, then don’t let your dream be the one that got away!”
Business tips from a top Dragon
This inspiring businessman offers numerous tips for entrepreneurs:
“Business is no different from a sport or game, in that you need to learn the rules and how to play by them. I believe that business is 90% common sense but often, common sense is not that common! Embracing change is more important now than ever, what with technology moving the goalposts faster than you can kick a ball at the goal!”
He says it’s crucial to do your homework. “The first thing anyone should do before launching their own business is their research. It’s so important. You wouldn’t sit an exam without revising, so why do that with your own business? It’s knowing more than your competitor that gives you the edge.”
“Before starting out, I wish I’d known how important networking was and how technology would make such huge changes to our lives. AI is already affecting our world and this impact will only get stronger.”
What if your idea has been turned down by the banks? “Question and challenge your idea and make sure you’re being honest with yourself. If all are positive answers, find a different point of finance. If not, move on to the next idea which might be the big one, and the one you could miss trying to make the poor idea work. Crowdfunding is an innovative way of raising finance, but does come with health warnings!”
The three main characteristics of a successful businessperson? “Common sense, passion, and someone who provides solutions, not problems.”
Does an entrepreneur need to be daring to be successful? “There is a difference between being daring and reckless. I take risks, but calculated risks. I never bet the farm. So, daring, yes… but reckless, no.”
He says it’s crucial to be “hands-on” with your business. “For me, the devil is always in the detail, but it needs to be hands-on where it is needed! You employ talented people to manage the day-to-day business and to work with you on the bigger picture.”
The best piece of advice he has been given? “Cash is king!”
Further tips are available at: www.theopaphitis.com/my-tips/