Ratner's Group

Gerald Ratner destroyed £500 million in shareholder value in April 1991 with a single sentence. Speaking to 6,000 Institute of Directors attendees at Royal Albert Hall, the CEO of Britain's largest jewelry retailer (2,500 stores, £1.2 billion revenue, 50%+ UK market share) was asked how Ratners could sell products so cheaply. His reply: 'Because it's total crap.' He compared his earrings unfavorably to a Marks & Spencer prawn sandwich, meant as self-deprecating humor for 300 business executives.

The acoustic signal wasn't calibrated for propagation beyond the immediate audience. Within days, national headlines repeated the quote to millions of customers, thousands of employees, hundreds of suppliers—all lacking the shared context that might have framed it as humor rather than contempt. 'Doing a Ratner' entered British English as slang for destroying something through inadvertent honesty. Customers boycotted stores. Stock dropped 80% by year-end. Ratner resigned in November 1992. The company rebranded entirely to Signet Group in September 1993, erasing the name that had built Britain's jewelry empire.

The biological lesson is precise: acoustic communication must account for signal propagation to unintended receivers. Frog mating calls attract females but also predators; the optimal call balances these competing selection pressures. Ratner's joke was optimized for executive insiders (reinforcing his reputation for cost-cutting candor) but catastrophically maladapted when propagated to customers whose purchasing decisions depended on believing the products had value. In communication biology, this is audience miscalibration—a signal effective for one receiver population that destroys fitness when heard by another.