Genesis
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Four times a year, English commerce answers a knock at the door. By tradition, and in thousands of leases still in force, commercial rent falls due on the old quarter days; dates with names older than any company that has ever paid them: Lady Day, Midsummer, Michaelmas, Christmas.
The knock does not ask how trading has been. It does not know about the weather, the recession, or the factory closure up the road. It arrives at the bookshop and the chip shop and the department store alike, four times a year, every year, for seven hundred years, and nearly everything a British high street does, the expansions and the discounts and the redundancies, is downstream of making sure the money is there when the knocking starts. This is a story about a man who arranged his life so that the knock never came.
Hifi central
Julian Richer was fourteen, a boarder at Clifton College in Bristol, when he started buying and selling hi-fis in 1973. By seventeen, he had three boys working for him. At nineteen, in November 1978, he opened a shop on London Bridge Walk with help from a photography retailer called Vic Odden, and put his own surname over the door as a pun.
The detail that explains everything afterwards is what is missing from that sequence: an employer. Richer never worked for anybody, never spent a single year inside somebody else's company learning the lesson everybody learns there, which is that a business must become as large as it can, as fast as it can. He arrived at the trade unindoctrinated, and it shows in his first serious decision.
He bought the buildings. Nobody buys the buildings. A lease is the whole technology of retail expansion: it turns a fortune you do not have into a sum you can manage, and frees your capital for stock, and every finance director in the country will bless the arrangement. But a lease is also a promise your younger self makes that your older self must keep, in sickness and in health, at Michaelmas and at Christmas, and Richer wanted no such marriage.
Any idiot can sign a lease, he told the Guardian; he wanted to control his own destiny. So for four decades, while every rival converted ambition into lease books, he converted profit into bricks, and today rent and rates at Richer Sounds come to about 1.5% of turnover, a figure people in the trade struggle to believe. Ownership, at its root, is the power to owe the calendar nothing. A man who owes the calendar nothing acquires a stranger power, the rarest one in business. He can refuse things.
The first thing he refused was growth. Success in retail issues its own summons: the format works, the money arrives, and somewhere a plan appears for forty new openings in eighteen months. Every chain in Britain answered it. Richer said no, year after year, for forty-eight years, and today the company trades from fifty-one shops, one a year, a pace that in his industry amounts to heresy. His explanation, offered without a flicker, is that they are simply not ambitious enough. What the refusal purchased was concentration. Small units in cheap positions, because he was buying them outright. Stock to the ceiling, so the room itself did the selling.
End-of-line and discontinued equipment bought for prices the chains could not touch, a range kept narrow enough to buy in bulk, and the savings handed to the queue of customers round the block. In 1994, the London Bridge shop, under a thousand square feet of day-glo stickers and free tea, entered the Guinness Book of Records for the highest sales per square foot of any retail outlet on earth. Dixons, at the time, managed around £625 per square foot. The little shop did over £17,000. The record has now stood for thirty-two years, longer than most of the companies it embarrassed. Not ambitious enough.
The second thing he refused was his own money. Through the late 2000s, the business fell for five consecutive years, profits down to £2.63 million by 2011, profit per employee halved in two years, and shops were closing. A fund that had bought the company with borrowed money and a five-year clock would have met those numbers with the only tool it possesses, a smaller payroll. Richer met them by declining, year after year, to pay himself a dividend. The buildings could not be called in, no landlord was knocking, and so a bad half-decade was absorbed by the one person who could afford it rather than passed down to the people standing in the shops. That is what the freeholds were for. Patience of that kind is an asset like any other. He had spent forty years buying it.
And what was the patience for? To understand the business, you have to understand the affliction. An audiophile will move a loudspeaker an inch and listen again. He will spend an evening comparing two cables and swear, correctly or otherwise, that one of them lets the singer breathe. He accepts, calmly, that the last five per cent of sound will cost him a multiple of the first ninety-five, because what he is buying is the breath before the chorus in a record he has owned for twenty years, the thing the machine hands back which he thought he already had whole.
From outside the room, it is madness. Inside the room, it is the best money ever spent, and the arithmetic underneath it is the entire secret of what follows: to the indifferent, everything past adequate is waste, while to the devoted the rewards climb as the caring deepens. The pursuit gives back exactly as much as you put in. Richer caught the affliction at fourteen, dealing separately out of a boarding house because he loved the kit before he loved the trade, and the company is what happens when that arithmetic is allowed to design a business.
Most of the economy runs on the opposite sum. Effort meets diminishing returns, caring becomes a cost, and the rational strategy is to serve the indifferent millions as cheaply as possible, which is exactly what every warehouse-sized electrical retailer in Britain spent forty years doing. Richer built his church for the believers. Walk into one of the small shops wanting your first proper system, braced to spend more than you can comfortably afford, and the person behind the counter asks what room it is going in, and how big, and whether there are curtains, and what you actually listen to, and then sells you something cheaper than you came in prepared to buy, because in that room, with those records, the dearer one would be wasted. Nobody has sold you anything. Two people who care about the same thing have found the answer together, and one of them will come back for the rest of his life.
That transaction requires the person behind the counter to stay long enough to get that good, and to be under no pressure to move the expensive box. Staff turnover at Richer Sounds runs near 15%, against a sector norm of 30 to 50. There are no zero-hours contracts. And every week, in every shop, the staff anonymously rate their own morale, with a tripwire attached: below seven out of ten, and somebody comes to find out why. A shop of six people, a slow Tuesday, a score of six, and machinery starting somewhere above them to trace the cause. The company treats unhappiness the way a factory treats a defective batch, as a fault with an origin. The kindness and the ruthlessness are the same instrument, and the world record is what the instrument built.
RIP
Now watch the same industry with the ownership reversed. Comet, founded in Hull in 1933, family-held and specialist for half a century, was sold by the family in 1984 and then began to travel: to Woolworths, which became Kingfisher, which sold it to Kesa, which in 2011 sold it to a private equity firm for two pounds, with roughly fifty million attached as a dowry to take it away. Twelve months later, it was in administration; the last of its 236 shops closed a week before Christmas 2012, and 6,500 people lost their jobs. In the middle of the collapse, the staff started a petition.
They wanted an investigation into how the company had been handled, and an answer to one question, asked almost verbatim: why were we kept in the dark about where the company was heading? Hold that sentence. It is the sound of thousands of people discovering that the structure they had stood inside for years had been invisible to them until the day it fell. After 1984, Comet was never once owned by anyone who was of it. Every owner held the position. Richer held his place.
But ownership only protects when it is whole. Morrisons owned the ground under most of its supermarkets, the great freehold estate of British grocery, and it saved them from nothing, because the shares were public and the shares were where the real power lived. In 2021, two private equity houses fought a bidding war for the company and paid £7 billion, with that property estate glittering at the centre of the prize, a treasure which a new owner could sell and rent back. The buildings alone protect nobody. Richer owned the bricks and every share above them, and completeness was what mattered. Ownership with a gap in it is not armour at all. It is a treasure waiting to be noticed.
If this were only about shops it would be a curiosity, but the country has just run the experiment on a national scale and published the results. In 2013, around 1 in 10 British vet practices belonged to a large corporate group. The share is now six in ten, and in March, after a three-year investigation, the Competition and Markets Authority reported what the change had cost: prices up 9.2% within four years of a practice being acquired, and, the finding to stop on, fewer than half of the big groups' customers, (47%), aware that their practice belonged to a group at all. Same building, same vet, same sign above the door, higher bill, and most people never knew a thing had changed hands. The state is now writing into law a requirement that practices tell customers who owns them, which is a remarkable thing for a government to have to compel, and the same tide has been running through dentists, care homes, children's homes and nurseries. Everywhere, the sign stays, and the structure underneath it changes, and the people on both sides of the counter are the last to be told.
Our Julian
Which is where this stops being about Julian Richer and starts being about you. Nearly everybody experiences work as a set of personalities: the good boss, the bad boss, the manager who listens, the director who does not. It is how work is discussed in every pub in the country, and it is the wrong altitude, because the personalities are downstream of the structure. Who owns the place, what they need from it, and how soon, that is what actually sets the terms of a working life. An owner with freeholds and no shareholders can let a shop have a slow year, and did, for five of them. A fund on a five-year clock cannot, (however kind the person sent to deliver the news may be). The capacity to refuse, to say no to the expansion, the dividend, the buyer, belongs entirely to whoever owns the thing, and most people cannot even name who that is in the place they work.
The staff of Comet could not. The customers of half of Britain's vets could not. The structure that governs the working day is the one thing about it that almost nobody can see. Audio has a name for the ratio that decides everything, signal-to-noise, and a company has one too. The lease book, the exit clock, and the quarterly demand are noise laid across the signal, and Richer's forty years amount to one sustained act of noise elimination. Most people spend their working lives inside businesses that are mostly noise, and have never once been told the ratio.
Richer could see his, because it was his, and in 2019, he used it once more, on himself. He had told the Financial Times in 2013 that his life's work was his legacy, that he had no spoiled child to run the business, and that the staff would inherit it on his death. In March 2019, he turned 60 and concluded that dying was a poor project management strategy. That May, he moved 60% of his shares into an Employee Ownership Trust, so the handover could happen while he was alive to steer it: the boy Vic Odden once helped into his first shop, helping five hundred people into theirs.
The company agreed to pay him £9.2 million for the stake, out of its own future profits, and he handed £3.5 million straight back to the staff, a thousand pounds for every year served, with the nine directors, already on six-figure salaries, left out of the pool. Weigh that £9.2 million. The company was turning over £189 million and making £9.7 million a year; his price valued the whole of it at about eighteen months of its own profit, when a trade buyer would have paid several times more. He set the price low enough that the people inside the business could buy it with money they were already earning.
This newsletter has been keeping a file on founders whose companies wear their own names, and it reads like a casualty list. Halston sold his and spent his last years, in court after court, failing to win back the right to design under it. Jo Malone is in the High Court at this moment, arguing about whether she may say that she is Jo Malone. An eponymous company is the hardest of all to leave, because the exit and the self tear along the same seam.
Richer's name was on the door, and on the column, and in the pun, and he walked out whole, and the difference has nothing to do with generosity. It is sovereignty. He transacted on his own terms, at his own valuation, at a moment he chose, to recipients he selected, while alive enough to watch it work. What corrodes a founder is the sale that happens to them. A decision taken freely, in daylight, at a time of your own choosing, sits outside every cynical reading, whoever the buyer happens to be.
Heaven
So the quarter days still come round, Lady Day, Midsummer, Michaelmas, Christmas, and the knock still lands on nearly every door in Britain, except fifty-one of them, because the people inside own the bricks, and the shares, and the record, and the name. Julian Richer began at fourteen in a boarding house and finished at sixty, on purpose. In an economy that never finishes anything, that may be the most subversive act in the story.
He built a machine for refusing, used it for forty-one years, and then performed the one refusal left: he declined to let the ending happen to him. The shop is still there. The record still stands. And four times a year, the knocking runs up and down every high street in the country, and at fifty-one doors it finds nothing at all. Hi-fi people spend fortunes chasing the absence of noise. This is what it sounds like.
See you on the next one.
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