As always, I set out slightly behind schedule for my hotly anticipated interview. Having sprinted to the station I sat slumped in a sweaty mess trying to compose myself and read over my notes to try and ensure I didn’t slip up. The Ryman HQ is situated just next to Wimbledon train station so there was little time to do this.
Paphitis’s office is modest inside, furnished with the extraordinary recycled chairs and desks that were featured in an episode of Dragons’ Den two years ago. Paphitis ushered me towards the bath tub by the window while he sat on a trolley (both twisted and contorted and adorned with cushions to make them almost pass as furniture). He further assures me that if I were to come back next week he would have his new desk which will be a wing protruding from the wall.
Jack Lenox: What was your first business idea?
Theo Paphitis: I’ve never had a business idea, ever. People think that you have to have a unique idea to make money. So you’ve either got to be an inventor, or have a ‘eureka’ moment and invent the cats’ eyes. An original idea is a very rare thing. I have just done what is in front of me and what is obvious. I have never done anything unique.
What was your first inspiration to go into business?
To be frank with you, common sense. I just couldn’t believe how little common sense there was out there. I became very frustrated but the more frustrated I got the more encouraged I became because I realised that if there are so many people out there with so little common sense, I must have half a chance!
I’m now 20, a lot of our readers are this age, what were you up to when you were 20?
Well, I was married. My second child was on the way. I had had various jobs and I started working for L&G around my 21st birthday. I had been working for Lloyds of London as a coffee boy when I was 16 and moved into retail at 18.
Moving on to Dragons’ Den, what advice would you give to people who want to pitch a business idea?
First, you mustn’t bore people unless they want to be bored. If they want to be bored with facts and figures you’ve got to make sure you know them. If a halfwit like me asks you about your facts and figures and you don’t know them, then you’re in trouble. Engage with the person you’re pitching at and get their attention but whatever you do, don’t bore them.
Do you think it’s important for people to be formally dressed? We often hear Peter Jones completely dismissing someone because they’re not dressed in a suit.
No, it doesn’t bother me whether you wear a suit or not. Jonesy just wants people to wear a tie for a crack I think – he gets off on it. For some people, it’s appropriate to wear a suit and tie, for other people itÂ’s not appropriate to wear a suit and tie. There’s no point coming to me with mixed signals dressed up in a pinstripe suit and a ponytail because you’re going to look like a fake. Be yourself, show me what you’re going to be wearing as you run this business.
So you don’t make a first impression of someone based on how they look?
I don’t think that’s fair. The answer is, of course I am influenced by how people look. I just don’t base my opinion on what you wear. Of course, if someone comes in dirty, smelly and covered in various piercings, I might struggle taking you seriously if you tell me you’re going to be selling a food product to the public.
Would you go on Dragons’ Den, if we were to wind the clocks back?
I would definitely have done it. When I needed to raise money it was tough. I reckon I would’ve got it as well. Jones would have bought in straight away – there’s no question Jonesy would have just thrown his wealth at me.
Would you recommend Dragons’ Den to up-and-coming ‘entrepreneurs’?
It’s a way of getting money but fortunately or unfortunately it has its positives and its negatives. It’s on TV, which means that if you flounder and make yourself look a bit of a plonker 5 million people see it. On the other hand, should you put a good pitch together and know your subject and give a good account of yourself, whether you get an investment or not, your product has been seen by 5 million people. It doesn’t get much better than that. You try and buy an advert in front of 5 million people for 10 minutes.
What has your best investment been?
Well, my best and favourite investment is to do with a young man who’s going to be here any minute – Imran who did the iTeddy. He pitched to me last January and by Christmas we had created the product, debugged it, sold it in Argos, sold out of it, and licenced it to Vivid Toys and now we sit back and take a massive royalty. So now he’s a very wealthy young man and he’s going to come and buy me a drink tonight.
What do you make of the other ‘dragons’? I know you have some partnerships with Peter Jones…
…and Deborah. Lots with Deborah. Lots with Jonesy and lots with Deborah.
But for instance, Peter Jones doesn’t seem to get on very well with Duncan Bannatyne?
I think that’s a lot of TV stuff to be honest with you. Duncan likes to play the part of a grumpy old Scot but he’s not really like that. Underneath all the layers he’s a big cuddly bear. He just likes to play up for the cameras.
So, you and James Caan seem to be the nicest of the bunch. Of course, you have people like Sir Richard Branson who come across as being very smiley and nice and then you have Sir Alan Sugar at the opposite end of the scale – do you think you have to be mean to be a good boss?
No, I think you’ve got to be able to take tough decisions and anyone who makes tough decisions will undoubtedly make unpopular decisions. If you make unpopular decisions some people might think that you’re being tough or hard and mean but it’s all part and parcel with business. You’ve got to take tough decisions and different people sometimes see it in different ways.
One of the things that you are spotlighted for on Dragons’ Den is turning around failing companies, which sounds quite difficult – is it case by case or is there a key formula to sorting a business out?
ItÂ’s both. It is case by case but there are key principles. The main principle is, pick a company that can be turned around. You cannot turn around any company. There are some situations where I run a mile because as much as I might be interested I just don’t believe it’s possible to turn it round. So choose well. Once you’ve got past that, rule 2 is buy well. Buy badly, and again you might never be able to turn it around – if you pay too much and this hits your cashflow then you’ve got problems. Once you’ve done 1 and 2 you can go to 3 and 3 is the art and the process of the turnaround which is probably the most exciting part. 1 and 2 are fun and they’re negotiation and buying but it’s the planning part of chess before you start making the moves. Once you start making the moves, now that’s the fun.
Some of the companies you’ve chosen have massive competition though; Rymans has WHSmith, La Senza has a whole host of competitors, what attracted you to these companies?
I always like niche players – La Senza was a niche player competing against Marks and Spencer. I like a niche player when you can get under the skin of the business and motivate the staff. I think Ryman has about 3,000 employees whereas Marks and Spencer has 30,000 employees. Obviously it’s much easier to motivate and coordinate 3,000 than it is to get 30,000 rolling so you have that advantage. It’s people-driven and once you’ve got past that planning stage and you’re executing the moves – taking risks, buying here, buying there, it’s the most exciting sort of business.
I see that you’re now a Non-Executive Director of La Senza having been Chairman, will you do the same thing with Ryman?
Oh yeah, once I’ve completely turned the business round my job is done and it’s not exciting for me after that. It evolves to another stage. La Senza was operating at £20 million turnover when we kicked off, when I stepped down it was at £200 million, it’s a different business now.