Ratner's Group
When asked how Ratner's could sell products so cheaply, he replied 'Because it's total crap' and compared his earrings unfavorably to a Marks & Spencer prawn sandwich.
Ratner's Group was Britain's largest jewelry retailer with 2,500 stores and £1.2 billion revenue when CEO Gerald Ratner gave a speech at the Institute of Directors on April 23, 1991. When asked how Ratner's could sell products so cheaply, he replied 'Because it's total crap' and compared his earrings unfavorably to a Marks & Spencer prawn sandwich.
The acoustic signal was meant as self-deprecating humor for 300 business executives but propagated to millions of customers, thousands of employees, and hundreds of suppliers. Within days, 'doing a Ratner' entered British English as slang for destroying something through inadvertent honesty. Within a year, the company lost £500 million in value. Ratner resigned in 1992 and the company rebranded entirely.
The case demonstrates that acoustic signals must be calibrated for ALL potential receivers, not just the immediate audience. Humor is high-risk because it requires shared context that distant receivers don't have.
Cautionary Notes on Ratner's Group
- CEO's joke destroyed £500M in value by failing to calibrate acoustic signal for all potential receivers