Workplace360: Your background is well documented but remind us of when you acquired Ryman.
Theo Paphitis: It was 1995, but Ryman itself is 130 years old.
W360: You must feel quite a sense of responsibility.
TP: Well, that was one of my opening lines when I resumed responsibility as Chief Executive because COVID decimated our balance sheet and cash flow. People underestimate the longevity issues the pandemic caused small retail businesses.
When I stepped in, I said, “This business is 130 years old and I’ll be damned if it’s going bust under my tenure. So, we’re going to get our shit together and decide how to reinvent ourselves and get back into profitability.”
Our primary sources of income through the business stores, as I call them (as opposed to consumer stores located mainly in CBDs), disappeared because people were working from home two or three days a week. The rent remained unchanged as landlords were unwilling to reduce it. With lower income, once the rates were reintroduced, it meant only one thing: losses. So, regaining profitability was my main aim.
W360: You stepped back in about a year and a half ago, correct?
TP: Yes, it was October 2022. I don’t think it could have happened any other way. I don’t want to detract from the efforts of the previous management team, but it would have been nearly impossible for them to do what I’ve done and can do. It may sound arrogant and negative towards them, but I will qualify that.
It wasn’t due to their lack of ability; they simply couldn’t make the instant, on-the-hoof decisions that I could. They’d have to go through a whole raft of management procedures and eventually make a decision, which they might not be able to make if it involved spending more money. They’d have to come to me and the board to justify and explain their decisions. I think it was impossible for them.
W360: Is the decision-making process easier now?
TP: Oh, listen: the decision-making process is incredibly simple. Nothing should take longer than three working days. Since I don’t have to consult anybody or have a board meeting, if I screw up, it’s on me.
W360: Let’s discuss your most recent financials – quite a turnaround.
TP: The key highlight is that we’ve returned to profitability. Also, we’ve been able to pay back the first tranches of the CBILS loans we had to take out during the pandemic to stay afloat. But the biggest achievement is not what is in those accounts.
Far more significant is understanding our reason to exist as a business. We’ve just talked about Ryman’s long history, but how many other heritage brands have disappeared from our high streets?
W360: Dozens in my lifetime.
TP: Exactly – and it’s not all down to bad management, contrary to reports in the popular press. Many of these brands lost their reason to exist. Perhaps someone could have reinvented them.
W360: Do you genuinely believe that? I’m trying to think of a notable example of a business that has been radically reinvented.
TP: That’s a good challenge. While businesses can be reinvented, some are just too difficult and too large. I made a sweeping statement and you’re right to pull me up on it.
I’m good at making sweeping statements but also very good at recognising exceptions to the rule. I’ll say department stores – it’s hard to reinvent those.
W360: OK, we’ll leave it at some.
TP: We need to be sure we have a reason to exist. When I bought Ryman nearly 30 years ago, I was told I was buying a dog and that the age of the stationery store was done and dusted. The paperless office was coming and we had 80 stores. Now we have nearly 200 stores and continue to open new ones.
W360: Well, come on then: what is the reason to exist now? What have you told your team?
TP: Interestingly, my team were looking for great words of wisdom and a light bulb moment from me. Instead, I asked them all to give me a reason why we should exist, why this building should exist, why the brand should exist and why they should exist. I pointed out that I could easily sell or close the business, sell the properties, put my feet up and not spend two days a week in Crewe.
W360: What were the reasons?
TP: I had my own ideas, but they were largely influenced by the past and the 20 years when I actively ran the business. That’s dangerous because the world moves on. While I own the company and attend board meetings, I also have interests in other businesses. I didn’t know the intricate details and it was up to me to learn them.
Understanding the business in general didn’t take me long. But was I confident that all my ideas were viable, deliverable and profitable? In all truth, no. I think anyone who says they have no self-doubt is not being honest.
It was crucial to get buy-in and ideas from what was left of the tier-two management. We recruited a new team and, most importantly, went on a journey to discover why someone would visit a Ryman store.
We concluded that our customers trust us. We saw this firsthand when people came into our store and donated thousands of pounds for good causes without asking why, like when we were raising money for Ukraine. It shows the trust of local communities because, in many areas, we’ve been there all their life. It’s not a bad base to start with.
However, our primary customer base is ageing. If all our customers die, I’m dead. So how do we get ourselves fit for the next 130 years? We need to attract the next generation and therefore go more ‘consumer’ as far as our stores are concerned.
A big driver – and it is as clear as the nose on your face – is hybrid working. Those working from home don’t want a plain black or grey notebook, filing cabinet or desk. They want attractive products in their home.
People are more relaxed, which is a great opportunity for us to be unstuffy and more customer- and consumer-friendly and appeal to younger generations.
We began by adding more craft items, so when parents take their kids home from school, they can pop into a Ryman store, spend £5 and find educational-type projects to keep them busy. We want the kids to be able to come in and find stuff that’s not just educational but fun and fashionable.
One of our big successes is the Legami stationery brand. We’ve also been amazingly successful with the uni-ball Posca range, which is more artistic and fun and something we wouldn’t have stocked previously. We sold more traditional markers.
Now, with the recent launch of the greeting card app, we’re using technology to drive footfall back into our stores.
W360: Some of those initiatives are still quite recent and might not yet be reflected in the numbers.
TP: True – the app is very new and we haven’t had a proper launch yet. It’s an amazing tool, with two more releases planned, which I’m excited about. By September, it will feature all the services we want, including printing.
For instance, if you have a thesis to print, you can download the app on your phone, send the document and pick it up within 60 minutes in one of our 200 stores. If you need it bound, no problem. It is an important part of our business.
W360: It sounds similar to many services the Staples stores used to offer.
TP: We actually bought a lot of Staples’ equipment when it closed down. Our printing services, week on week, are our most profitable SKU now. Over the past 12 months, we’ve invested significantly in the greeting cards, the printing app and our website.
W360: You obviously have a finite footprint in a store. What had to give way to make space for these new additions?
TP: It’s so blindingly obvious it stares you right in the face. As a serious business stationer, I could give you ten different staplers and hole punches. But does a customer need that many? Those who want something more specialist can pay for it there and then and have it delivered free of charge the next day.
W360: So, SKU rationalisation.
TP: Very much so. We’ve had to re-evaluate every SKU and category without devaluing our specialist stature. Sometimes, the team suggested removing slow-moving items but my response was that we need to keep those products because no one else stocks them. When a customer wants it, they want it. You have to make those calls.
W360: You have a B2B business and a very nice online presence, but your efforts have clearly been directed towards retail…
TP: I’m a shopkeeper and it’s the first thing I had to fix. Without that, the rest wouldn’t have a reason to exist. They rely on the brand name in the high street and the reflected glory from our hardworking colleagues in the retail stores.
Once I got that sorted, I focused on the app to drive people back into the stores. Now, my next exciting journey is the Ryman online business – not the B2B side, as I don’t see the priorities and the wins there as much as I see them in the next stage of the development of Ryman and the website.
It’s a great website and we’re adding a new click and collect module soon. We’ve launched a rewards scheme and the data that gives us to understand our customers better is amazing.
W360: OK, let’s delve into B2C then.
TP: The new website’s great because I’m constantly evolving it. Previously, we used a third-party provider, but the greeting cards, loyalty scheme and printing can be done via the app and the website. I expect our printing business to double over the next year from what it is today.
W360: How important is it right now?
TP: It’s our most profitable category and it’s brilliant not relying on a third-party brand. I’m relying on my colleagues and the Ryman brand to deliver a service. It’s all within our grasp to improve it or cock it up.
W360: Are there other products and services coming down the pipeline?
TP: There’s a whole raft of things. I’ve already mentioned we’re revolutionising click and collect, which goes live with Robert Dyas in July. Ryman goes live shortly after that, which will change the way we operate. In the coming months, the aim is to utilise our 200 stores as hubs, so whether it’s a last-minute gift or a forgotten occasion, we can deliver to customers within the hour.
W360: Like some Uber-type tie-up?
TP: It’s tailored for urbanised areas where our stores are located. The new systems have been tested and they work.
W360: Are bolt-ons such as flowers, chocolate, champagne etc a logical extension as well?
TP: Watch this space. By way of example, a reminder calendar will be launched in a few months, allowing customers to buy gifts instantly.
W360: What does the competitive landscape look like for you online?
TP: Online is interesting for stationery; it’s tough because of the average price of the product. Our online presence has been remapped and we’re in the second phase of reinventing the Ryman website. Numerous proof-of-concept tests are yielding promising results.
You know, the easiest person in the world to fool is yourself. We can say what we want about our brands and actually believe it. Whether it’s true or not is another matter. What we’re doing now is putting our bum in the bacon slicer.
W360: We don’t have enough pages for all these pull quotes!
TP: (Laughs) And only I could do that. Could you imagine another CEO saying to the Chairman of the business: “I’m going to do this, and the consequences of failure could be disastrous because we’re going to discover the emperor has no clothes on.”
By the way, I’m confident that the emperor is clothed and the brand has the value and the recognition to carry off what I plan to do.
W360: Every online retail chief exec I’ve ever spoken to has said the biggest issue – apart from dealing with large competitors like Amazon – is the cost of customer acquisition.
TP: Of course it is. And it’s the re-cost of acquisition. Customers are promiscuous, with a whole raft of other people trying to drag them to different websites.
Mr Google sells you a customer. You pay Mr Google and the following day he’s back on that customer trying to send them to your competitor and he gets paid again. That is why we started the loyalty scheme: so we can sell to customers directly, with the benefit of what I would have paid Mr Google.
W360: Without wishing to sound rude, why did it take so long?
TP: Well, it bloody well did! I mean, I can’t do everything. I had managers, but they didn’t do it. It was one of my frustrations: there was always a reason why it didn’t happen. Going back to what I said earlier, I’ve put my bum in the bacon slicer. So, here we are – the loyalty scheme is up and running, the app is live and the new Ryman Design store concept has launched.
W360: Is Ryman Design filling the gap left by the demise of Paperchase?
TP: It’s filling the gap for anybody who wants design-led stationery. We opened a fourth store in Edinburgh in May; another follows soon in Cheapside in London, with another planned in South London. We’re going to try to get to ten by year-end.
W360: Do you have a rough idea of what the country could tolerate?
TP: I’d say around 30 more.
W360: That seems less ambitious than what one might expect from you.
TP: I’ll tell you why. I’m realistic and I want them all to make money. I could open more for the sake of having more stores and you might argue, “Theo, you’ve got to get the economies of scale and the minimum order quantities.” Call me unambitious, but if you give me another 30 profitable stores…
W360: I think I’m the last person to accuse you of lacking ambition.
TP: That’s fine, I don’t mind. Maybe it will make me focus on it. I’ll certainly be thinking about that now.
W360: Before we shift gears, let’s touch on Amazon. Is it a level playing field?
TP: No. It’s not. The playing field is anything but level. It’s comical. Successive lazy governments have failed to do what’s right for the country, both for the fabric of the communities we serve and financially. Anybody who put their shoulder to the wheel could generate a lot more income for the Treasury if people were taxed equally, but they aren’t.
We all know that big online tech companies don’t pay their fair share. There are companies importing products, avoiding VAT and rates and giving nothing to the Exchequer but taking a big slug of the retail cake. How can that be right? If I were in charge, it wouldn’t bloody happen.
W360: I’m not going into politics, but you’re one of dozens of big brands on the average British high street. Why isn’t there more collaboration through retail consortiums or other entities?
TP: Because they give you lip service. Bless the British Retail Consortium (BRC): Helen [Dickinson, CEO] does her best, but the BRC – which represents a wider tranche of retail (not just physical) – has to toe the line. Recently, it has been more vocal.
I used to criticise it for being too polite, but it is never going to get the politicians over the line. Sometimes you need to back them into a corner; they don’t react any other way and just fob you off and move on.
W360: Have you ever been tempted to venture into politics?
TP: Don’t be ridiculous. I’m too old and far too opinionated. Worse than that, when I do a job, I like to do it properly. Restructuring business rates is complicated and won’t get them many votes. It will get them my vote, though.
W360: Independent retail stationers face some of the same issues you do. How confident are you of their future?
TP: Quite honestly, I don’t know their situation well enough. I believe there’s a future for the stationery industry. If we look at some back-to-school products, for example, they’re not particularly Ryman-type products, but it’s what’s in the store. We’ve got to evolve and have a reason to exist, and they will have a reason to exist. It might just take some redefining.
W360: I recall you trialled some dual-brand stores – Robert Dyas and Ryman. Are they still around?
TP: There are eight. They’re really good and all make me good money.
W360: You’ve got a big smile talking about them.
TP: I’ll tell you why. It all started as another point of frustration for me – one that I nearly fell out with management over. We had a store in Bexleyheath that was coming to the end of its lease; we’d been there 100 years or so but weren’t making any money. We had a Robert Dyas store opposite that was twice the size it needed to be.
We thought we had a deal with the landlord to renew the lease under new terms, but he played hardball, assuming we had no other options. He was wrong. I just moved across the road, rebranded as Robert Dyas Ryman and refitted the store.
W360: It sounds like more of a “fuck you” statement than a strategy!
TP: It was a “fuck you” statement but also part of a strategy that had been in my mind since I bought Robert Dyas. When you have stores opposite each other, it makes sense to streamline operations with common deliveries, till systems, back-office systems, alarm systems, etc.
Initially, the management team suggested creating a new brand. I disagreed. We kept the Robert Dyas brand intact, simply adding a Ryman sign. The store layout was straightforward: 1,000 sq ft for Ryman on the right and 2,500 sq ft for Robert Dyas on the left, with a shared entrance in the middle.
The familiar red and green branding might jar a little, but it’s what made it so interesting and the store went straight into profitability. When we’ve had the end of leases and could do so, we’ve done the same and turned marginally profitable shops into really profitable ones.
It’s been great and I’ll be doing more. Is there a plan to do 100? No. Can I see another half a dozen in the next 12 months? More than likely. And if I find a store in a good market town which is big enough to take both of them, I’ll open them.
W360: Shifting to B2B: given Ryman’s strong brand, trust and reputation, I’m surprised you’re not bigger in the B2B space. Do you feel any frustration about that side not keeping pace?
TP: (Pauses) Frustration isn’t quite the right word. Disappointing isn’t either. Let’s consider the barriers to entry. Twenty years ago, e-commerce was really in its infancy.
If you wanted a stationery chain, you’d have to open at least 40 stores – a big cost: warehouse, trucks, distribution centres, infrastructure, tills. It created a substantial barrier to entry.
This wasn’t the case in the B2B sector, which is why you have so many independent B2B resellers – good family businesses in a nice town, often operating from a small shop or even a shed, with a van for deliveries.
W360: And they don’t even need a van.
TP: Lots of them do local deliveries. So you are competing with good, solid local businesses run by the owners, which is always a wonderful thing.
W360: As you’re finding.
TP: Absolutely. I love small businesses and have loads of them in my Small Business Sunday network. They’re brilliant. Every time I meet with them, there’s so much energy that I bounce out of those get-togethers like a spring chicken.
Then you had the big corporates going for the big clients. It was all about volume, with really tight margins and a lot of hairy-arsed salesmen – as they used to call them. This is not the way I portray my business or myself. It’s not my ethos. So we were never really going to compete with them.
Then we saw – I’ll pick one that’s been in the news recently – Euroffice, which came out of nowhere and did amazingly well because it used technology instead of hairy-arsed salesmen. It didn’t have stores, could cut margins, not worry about the pricing in stores, etc. But it was hard for us to copy or imitate them because of our retail portfolio.
You’ve got to stick to what you’re good at. We have a fledgling B2B business, but frankly, it’s not my priority. It just ticks along, doesn’t make any money but doesn’t lose any either. There might be opportunities for growth in the future, potentially through partnerships with someone who can dedicate the necessary focus while maintaining the integrity of our brand.
W360: Before we wrap up, I want to ask about sustainability. What are Ryman’s credentials and what are you doing as an organisation?
TP: I was a bit ahead of my time on this, which is rare. I did a fantastic video around 13 years ago about accounting for sustainability in your business. I got Deborah Meaden and Justin King involved, Lord Stuart Rose, Sir Richard Branson and Indra Nooyi, who was CEO of PepsiCo at the time. We got then-Prince Charles involved as well through the Prince’s Charities.
It’s a hilarious skit and you can still find it on YouTube. I’ve always been very much along the lines of, “We’re all interconnected and I don’t want to leave my children a world that is not fit for the future.”
There are so many things we all can do. Installing solar panels on your warehouse roof. The payback for LED lighting is within 12 months for a business. Almost every company car we have is now electric. Why wouldn’t you do these? But we only do things when it hits the bottom line.
It’s dead simple, but there has to be a lead. I’m not talking about government subsidies for businesses; I’m talking about creating an environment where sustainable practices are the norm. Unfortunately, governments have been very poor at providing that leadership.
W360: Last question. You’re going to be 65 this year. What are your plans for the immediate future?
TP: Well, clearly, I’m over the hill now.
W360: Yes, well over.
TP: (Laughs) I’m no longer a young whippersnapper. I felt terrible at the London Stationery Show because I was like a national treasure! I mean, stop it. Being at the twilight end of my career is quite frightening, but as long as I’ve got the energy and enjoy what I do, I’ll keep doing it.
W360: So you’ll be hands-on at Ryman for a little while longer?
TP: Not too long. I’ve got other interests in retail as well.
W360: A lot of knickers to sell.
TP: A lot of knickers to sell, a lot of hardware to sell, plus other investments.
W360: What’s your succession plan? When Mrs P finally says: “OK Theo, we’re going to spend more time in Spain and you’re going to stop work.”
TP: People stop working to do what they enjoy but this isn’t work for me. At some stage, the management team will take over. As I said when we started this interview, the most effective way to achieve transformation is with the business owner involved – making those quick decisions with the right information and avoiding corporate paralysis.
If you’re the owner, the buck stops with you. When I believe we’ve got enough projects on the right path, then I’ll step back.
W360: Well, it’s good to see you gainfully employed at last. Thanks, Theo.
