Famous for being one of the business investors on BBC Two’s Dragons’ Den for nine years, Theo Paphitis has multiple business interests and a personal wealth of £250m. He built his wealth through ventures in property finance and telecoms but, more significantly, through his ownership of retail brands such as lingerie chain La Senza, which he sold in 2006 for £100m. Today he owns stationery firm Ryman, homeware chain Robert Dyas and Boux Avenue, another lingerie outlet. Cyprus-born Paphitis, 55, lives in Weybridge, Surrey, with wife Debbie and their five children.
How did your childhood influence your work ethic and attitude towards money?
Like most people it had an enormous impact. My family come from Cyprus. Both my father and my grandfather worked on the British bases there and as the British government granted independence to Cyprus, they granted British passports to those who worked with them.
My family were poor and the only asset they had was that British passport. My father bought a two-up two-down for £880 in Gorton, Manchester, when I was about seven. We then moved to London but my parents split up, so my mother raised my brother and me. We lived in a council flat. My mum didn’t have any spare cash so there was never any pocket money.
In my early teens, I was working in a Wimpy Bar and delivering cab company cards to make cash. I also ran a tuck shop at school. I struggled academically because of being dyslexic. When I saw other families and what they had, it inspired me. I thought I can get that, too, if I work hard.
Has there been a time in your life when you didn’t know how you were going to pay the bills?
Yes, very early on in my married life, when Debbie and I were still young. I married at 18 and as Debbie wanted children, that is what we did. I didn’t think about the future, so trying to get a mortgage, pay for the car; all those daily struggles were very real to me then. Friday was fish-and-chips night and that was a real treat. I will never forget those times.
What was your best business decision?
The one leading to my love of retail stands out. I left my first “proper” job as an office boy at Wright Dean, a Lloyds of London brokerage, where I started on £20 a week at the age of 16, and went to work for Tyme, part of Watches of Switzerland, in Bond Street. That is when my passion for retail began, as I was a natural salesman.
Of the businesses that you have at this moment, is there one that you have the most ambitions for 2015?
Boux Avenue. It is a new brand, with international and UK branches. Currently there are 25 stores in the UK and 10 internationally, plus a thriving eCommerce arm. By the end of 2015, I want to be able to say that we have more overseas stores than in the UK. I have another business, Robert Dyas, that is 140 years old that I have great aspirations for. I am planning to take it from a mainly regional store base with 98 stores, to nationwide.
What is the biggest challenge you are facing in 2015?
The next election in May is the biggest single uncertainty for business today. Forget the national debt; forget the recession, the biggest challenge for business is this one election. No one knows who is going to get in and what he or she is standing for. Politicians have been bandying around numbers that don’t add up, vote winning initiatives, which are nonsense. I do believe politicians should have to go through some form of scrutiny before they are allowed to say such things.
What is ‘Small Business Sunday’ about?
Every week I invite small businesses to contact me on a Sunday evening via Twitter between 5-7.30pm. As I have a healthy Twitter following, it is a good opportunity for small companies to market their brands and get the kudos of being involved. I pick six to tweet about the next day.
Post Dragons’ Den, do you see yourself as a brand that you are marketing as well as your businesses?
Well, I am better known in parts of the country than some of my businesses and that is purely because I have been on television. Robert Dyas isn’t very well known in the north of the country but in the south it is an institution. I do use that recognition to promote my companies – but whether I am a brand or not, I’m not sure. I’d like to think people know what I stand for, which is straight-talking honesty, and telling you not just what you want to hear but where it is at.
What has been your most lucrative work? Or deal?
Buying La Senza for not a great deal of money and selling it for more than £100m in 2006. That was a decent deal but it didn’t happen overnight. Ryman and Robert Dyas have also been good buys.
And what has been your worst financial decision?
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. It was a huge blow to my confidence and I took six months off to rethink what I was doing.
Are you more of a spender or a saver?
I’m a shopaholic. I really am. I can’t help myself. I do go into, browse, and purchase from my own shops, too, although the CEOs who run my businesses wish I didn’t. I will challenge them if I see anything wrong on the shop floor. I’m not a good saver.
Are you naturally good with money or do you have to work at it?
I have had to b—– well work at it. I understand the value of money, but it has taken experience. I have instincts about money but that again is from experience. You need to work at things to be good at them.
What’s been the most difficult lesson you’ve learnt about money or business?
Cash flow is the bottom line. I often say to managers you can survive for many years with lack of profit but lack of profit is like a cancer, it eventually means that it kills you off slowly. Lack of cash flow is like a heart attack… when you can’t pay the bills at the end of the month, you are dead. It is over. So making sure cash flow is healthy and not having to rely on the bank has been very important.
Do you prefer to pay by debit card, credit card or cash?
All of the above. I pay in cash, carrying several hundred pounds on me at any one time – I like to feel the notes in my pocket. I use a credit card for large purchases because of the insurance but always pay them off, as I don’t like to pay interest. And a debit card when necessary. I even use PayPal.
Do you have a personal pension or long-term financial strategy?
I have both. I set up a pension when it was prudent to because of the tax relief schemes at the time. I am not planning to retire any time soon, though. I am very fortunate, my personal wealth, my financial investments whether they be material, property or financial, God willing, should see me and Mrs P off to our nursing home quite comfortably.
What are your financial priorities for the next 5-10 years?
To carry on doing what I love.
Do you meet regularly with or use a financial adviser?
Yes… every few months.
Are you a good tipper?
Yes, I love to tip. I love to put a smile on people’s faces who have gone the extra mile. I won’t tip for bad service.
Do you invest in stocks and shares?
I have a balanced portfolio. I have properties, stocks and shares… cars, you name it. I don’t follow the stock market personally.
If there was one thing you could change about the financial world what would that be?
I would try to change the culture of wealth creation without output, although it is very hard to see it changing. The way people move money to make money and make buckets of it, with no output to show, upsets me. Some of those people act without a lot of conviction or morality. There should be more accountability and transparency. I know there have been huge changes in this area but it must continue to change.
Is there anything you don’t like about handling money?
Do you bank online?
Yes. I bank online. I love it.
Does money make you happy?
Money per se doesn’t make you happy but, boy, does it go a long way in lightening the burden. However, a lot of incredibly rich people are really miserable and no amount of money will make them happy. I know people with very little wealth who are just a joy to be with.
Source; The Telegraph, Roz Lewis, 11 January 2015