Unexpected start-up: Lord Harris at 75 proves its never too late to set up a new business
After years of squeezed incomes, high rents and with a terrible winter keeping shoppers indoors, the British high street is nothing short of a disaster zone.
So the opening salvo by veteran carpet-seller Lord Harris comes as a surprise.
Carpetright, the company he founded – he has moved on to a new venture and is at loggerheads with the management at his old firm – is on its knees, embroiled this weekend in a draconian bid to save the business by shutting shops and shedding jobs. Harris, however, couldn’t be more chipper.
‘I think this is the best time to set up a new retailer,’ says the Conservative peer and Tory party donor.
Why? At the grand age of 75, Harris has embarked on a new business with his son and reckons he can take advantage of others’ misfortunes by hiring disillusioned staff and by taking over retail premises more easily – and that includes his former Carpetright empire.
‘You are in a downturn, you can get good people and stores. You can build the business,’ he says.
His fledgling chain Tapi, which unsurprisingly sells carpets, may be a beneficiary, but Carpetright, which he founded in 1988 and left three-and-a-half years ago, is less fortunate.
The 426-store chain has already asked its landlords for rent cuts because 205 of its shops are either in the red or making very little money. Next month it will try to raise £60 million to repay its debts.
What does he feel about Carpetright’s financial woes?
‘The only feeling I’ve got for Carpetright is the staff that worked for me for years. I feel sorry for them.’
He adds that he is hiring former staff – there is a waiting list, he says – but he can’t take everyone.
His concern doesn’t extend as far as chief executive Wilf Walsh, whom he suggests has tried to shift the blame for Carpetright’s decline on to decisions made under his – Lord Harris’s – tenure.
At the time of Harris’s departure the chain was worth £200 million. Now it’s worth £25 million. He says: ‘I don’t feel sorry for Walsh. He’s lost the company a lot of money and he’s still taking £800,000 a year.’
As for Carpetright, it blames the consumer squeeze, Brexit – and it points the finger at Tapi.
In documents drawn up by Carpetright’s advisers Deloitte, Tapi is described as ‘a new national competitor entering the market with a widespread and aggressive store opening programme that has put significant pressure on the group’s best performing sites’.
There is clearly no love lost between Harris and Walsh. But the peer says there should be enough room for two well-run chains in the market. Lord Harris’s son Martin runs Tapi, and opened his first store less than three years ago.
The family expects to make its first profit next year. They are hoping the chain will have at least 110 stores by the end of this year.
‘We’re just starting Tapi, we’ve got investors that just want us to go forward and they like what we’re doing. They’re not worried about profit yet. When we get to 100 and then 150 shops and we get the internet going then we will [make a profit]. At the moment we are more interested in getting the stores open and getting things going,’ he says.
Sources say Tapi has been in touch with landlords at outlets where Carpetright has handed the keys back and even some where property owners have been asked for rent cuts of up to 50 per cent.
‘No one’s heard of Tapi,’ he admits. ‘Only 5 or 6 per cent [of shoppers] have, according to our research. But we are building on that.’
He may be in his eighth decade, but says he’s ‘fit as anything’.
‘I love it. It’s been 60 years. We work quite late some nights, don’t we?’ he says turning to his property manager Tina, with whom he regularly travels the length of the country to find new stores. His optimism can only be described as bracing – particularly at a time when a string of household names are going bust and many others are on the rack.
So far this year, Toys R Us and electronics chain Maplin have gone bust. Others, such as fashion chains New Look and Select, have triggered partial insolvencies similar to Carpetright, which allow them to escape paying rent bills.
Word has it that department store House of Fraser and Poundworld may follow suit.
The uncertainty – which Harris says includes worries over Brexit – affects the decisions that shoppers make in stores.
He says the state of the economy even influences people’s taste in carpets. When times are tough, they are more likely to go for a ‘safe’ option, such as a plain neutral shade that they can keep for years, rather than bright colours or patterns that might go out of fashion and can be costly to replace.
‘There are only two colours that sell at the moment: grey and beige. You can’t buck a trend with carpets – people either want colour or they don’t,’ he says.
Tapi has a string of wealthy backers, including Harris’s friend Lord Kirkham, founder of DFS, with whom he part-owns racehorses. Other investors are textiles mogul Sir Harry Djanogly and David Herro, a straight-talking New York fund manager.
The new stores are in smaller outlets in smarter retail parks than Carpetright stores. The Harris clan have spent more on fitting out stores and samples are hung on clothes hanger-style hooks, making it easier for customers. The stores even have a signature scent – which one staff member suggests smells like ‘fresh linen’.
As ever, Harris is having a busy day. As well as overseeing his Harris Academy schools – 44 of them with 32,000 pupils – he and his wife run a charitable foundation. That afternoon he is due in the House of Lords for a vote.
‘It’s all Brexit,’ he says. ‘We’ve got to do it,’ he adds, though he criticises David Cameron’s decision to call a referendum – while reminding me that the former Prime Minister is a ‘nice man’.
A former deputy treasurer for the Conservative party, he was closely involved under John Major. Nowadays, he has no official role but says: ‘I still know what’s happening.’
Although he described Theresa May’s election campaign as ‘hopeless’, he now says she is doing ‘a fantastic job’ despite the tough circumstances. ‘Whatever she agrees, [on Brexit] 50 per cent are going to agree with her and 50 per cent are not.’
‘I blame Cameron for it, for calling the referendum. He should have left it for another six months and got a better deal from Europe. But I think they thought they were going to walk [the referendum] and win. They didn’t fight hard enough.’
People are not going to be happy about Brexit, he says.
Specifically? ‘The one where they said they are going to put an amount of money into the health service,’ a subject dear to his heart as he has been involved for years in looking at how to make the NHS more efficient, dating back to the 1990s.
‘There is enough money – but there’s no one to take control of it,’ he says. ‘It’s too big an animal.’
Absenteeism and poor management, particularly when purchasing supplies, are two key issues he has encountered. As for the high street, he concedes it has deep problems and says it never really recovered from the crash of 2008.
‘It is either coffee shops, charity shops, betting shops – there’s not much fashion, the high street has changed so much. The worry is now, how many shops are going to be empty?’