Theo talks to Velocity Magazine about business, entrepreneurship and the retail industry
As the image of the modern-day entrepreneur goes, Theo Paphitis probably has it just about right. The 57-year-old Cyprus-born owner of Ryman, Boux Avenue, Robert Dyas and latest acquisition London Graphic Centre, is modern, stylish, warm, approachable and brutally down-to-earth. There is no hiding behind pretentiousness, he doesn’t buffer simple analogies with convoluted business speak, and if you’re looking for a rags to riches case study – throughout a life spent battling the limitations of dyslexia – then Paphitis is your man, as Velocity magazine discovered. Theo Paphitis is regarded by many in retail as the high street’s best ‘fixer’, and it’s little surprise that Theo is quick to embrace and explore the latest trends – that’s partly how he has turned around a succession of failing businesses. The online space is a pivotal part of that – a platform on which his mantra of “retail is detail” can truly be played out, refined and honed.
‘Brand Paphitis’ includes over half a million Twitter followers (@theopaphitis), hugely visible presences on Facebook and YouTube, extensive charity work including as a director of Comic Relief, and a website that celebrates business by offering advice, information and feedback to those who make contact, not least through his weekly #SBS Small Business Sunday competition, where he rewards the six best businesses who tweet him about their companies. It provides an instant marketing boost to them and access to the 2000 other like-minded businesses in the network.
“I love seeing the ambition and passion in these businesses. People shouldn’t get into business thinking it’s easy, because believe you me it isn’t, but it’s such a good thing to see people of all ages, feeling inspired and encouraged. That didn’t happen before - in the old days it was just your bank manager who would give you that real belief that an idea was good… or not! These days there are so many influences outside of that, and as long as you remember the mechanics of supply and demand, particularly in what are now crowded markets, you’ve got a fighting chance.
“And like I said, ‘retail is detail’. You can never have it entirely right, but the more effort you put into the detail of your business, the more you will stand out from the competition and ensure mistakes don’t slow you down or, worse still, put you out of business altogether.”
Paphitis came to the UK at the age of six, and admits to having limited memories of his time back in Cyprus. His mother worked modestly in the local sugar factory while his father was as a musician. He describes landing in Manchester in 1965 as a new beginning, with the family having a “Coronation Street-style upbringing”, paying just £500 for their first house. “It was obviously a world away from what we were used to back in Cyprus, as was the weather, but the lure of coming to Britain was as great then as it is now, and there was a huge sense of adventure for us.
“When we moved to north London things got tougher though – it was often the choice of paying for heating or paying for food, but you are resilient as a child and that resilience has served me so well over the years because I would never give up.”
Wind forward and Theo has amassed a personal fortune in excess of £280million, through a variety of means… mostly perspiration and determination.
“It might sound strange but I don’t think I’ve ever had an original idea, that Eureka moment and, you know, not many people do. I look at other people’s ideas and try to change them – that’s what I do. I can see imperfections in theirs just as, I am sure, people can see imperfections in mine, and that’s what really excites me.
“We’re so driven by new things in society today that, in some ways, we’ve been led to think it’s a bad thing to be inspired by someone else’s idea, but I disagree. Don’t feel bad if a rival has got there first – just make sure you do it better!”
In terms of coming in to rescue failing companies, Paphitis admits it’s a unique challenge and something he’s always loved. “For a company to find itself failing, it’s either in the wrong sector, badly managed or below capacity for its market,” he offers. “There are a other things that can be going on that will hold it back, but more often than not the solution is new people, new ideas, and perhaps shedding half of the business and focusing on one or two key areas. But all of that requires someone dedicated and passionate when it comes to picking up the slack. It can be painful, and it’s often hard work, but as the old adage goes, sometimes you have to go backwards to go forwards and that can be so true in business.”
In recent times, the profile of the business saviour has been muddied. Standout examples include Sir Philip Green and the BHS pensions saga, and Mike Ashley’s handling of Sports Direct’s commitment to the minimum wage.
“Just like sitting in the chair at Dragon’s Den led to breathing life into an idea or fledgling business, it is just as important for entrepreneurs to revive traditional businesses that haven’t been able to keep up with the pace of the changing business world.”
Indeed, that determination to save saw Paphitis a strong vocal force behind a rescue package for stricken UK high street champion Woolworths in 2008, but his willingness to walk away from a deal epitomised the entrepreneur’s grounding that sentimentality in business rarely pays the bills.
“I did like the look of Woolworths - a British institution and a brand that everyone recognised,” he admits. “But as usually happens, the administrator was looking at a very different picture to me. It’s important to be able to back away without convincing yourself to pay a premium for sentimentality because, long-term, you’ll rarely get that premium back from customers, especially in retail. Yes, there is brand loyalty to a point, but consumers are also willing to move on very quickly when they need to.
“What I’m saying is sentimentality only goes so far. It may well be good for a business in the short-term, as people like the idea that they’re investing into a piece of nostalgia, and there are lots of businesses that dine out on this ethos, but it still needs a hard business edge, and if you don’t have that, you’re staring into the abyss.”
Of course, commercial aims in the UK currently are in a state of uncertainty not experienced since the global financial crisis of 2008. If the handling of Brexit was a challenge in itself, even for a strong leader supported by a stable parliamentary majority, the new situation we find ourselves in – a previously untried alliance of Conservatives and Democratic Unionist Party of Northern Ireland – looks certain to spell out unsteady times across all sectors.
Paphitis was undecided on how to vote through much of the EU Referendum campaign and spoke out about the pantomime of both sides and the lack of facts on offer to the voting public. He publicly stated that the EU – commercially at least – is a failed experiment, and eventually became a reluctant Brexit voter as none of the Remainers’ arguments stacked up. Yet whether in or out, his response to numerous economic challenges over the years is usually to revert back to one hardy, core component of economic health. “What I’ve learnt when any of these crises come about is there is no magic wand – you can’t just make stuff better. The important stuff for me is always jobs – jobs is confidence, confidence gives rise to spending, and spending inflates the economy.
“Without a positive outlook to jobs and their availability, there isn’t an economy that can steer clear of trouble, because getting more people in work is the catalyst because for strong upward movement. And yes, I’m talking about jobs as a fuel to increasing spending; but jobs also imply less reliance on the state, and let’s not forget the feel-good factor that benefits economies, such as reductions in crime. The UK is a consumer-led economy and a downturn in consumer confidence damages our economoy severely.”
Few would argue we have some tough times ahead. Does the former Dragon believe our future is in safe hands?
“The business world needs to remain encouraged, incentivised and receptive to new ideas, Brexit or otherwise. When politicians start to step too far into entreprise it doesn’t work. Entrepreneurs are a different breed,” he continues. “We get up off our backsides, we make stuff happen – that doesn’t remind me of politicians, certainly not at the moment, that’s for sure.
“And that’s the difference – we can’t expect one to support the other unequivocally because they live in different spheres. But politicians need to help businesses, not hinder them.”
For the future, Theo lives well and could hang up his coat tomorrow, but sitting opposite him, it’s churlish to suggest retirement is ever on the cards. “I just wouldn’t know what that looked like,” he smiles. “And doing this isn’t work in the traditional sense – this is a pleasure of life. It’s given me great experiences and I’ve met so many wonderful people, and I get to do something I love and am very passionate about.
“I think if I ever thought about slowing down I’d always want to reinvest that time in new businesses, so not slowing down very much at all really” he says.
Theo is also heavily involved in numerous charities, personally and through his businesses: “It’s important to be philanthropic as a business – and businesses need to realise that even a small about of time or money can make a big difference to charities and causes, especially if we all take responsibility for doing our bit. My businesses have raised over £4million for Comic Relief over the years and the team love going the extra mile for a great cause, which also boosts morale.”
Looking to what lies ahead in the business world, Theo reflected on the unprecedented times we are now in: “We are living in the fastest changing time in the history of mankind and that’s something very exciting with a huge amount of opportunity, but as I said earlier, it’s important to keep up, adapt and innovate, or you could become one of those nostalgic failures, that consumers love but don’t serve them in the way they need for right now.
“The time is now to invest in the alternatives and the triggers that can transform your business model. Currently my businesses have five seconds to win a customer over in the retail space, but at the moment, five seconds feels like a very, very long time in today’s ever-changing world.
The unicorn businesses of next year, are probably sat at home in their parents’ house in their underwear, dealing with the woes of adolescence, but with a world of opportunity at their fingertips. It’s a brave new world out there, and if you can keep up with the pace of it, you’re already onto a winner.