PHIL HARRIS scuttles between stacks of carpet samples. He rifles through them, casting his eye critically over each, every now and then pausing to gather one up.
“Here, look at this one. Feel the texture,” he invites, of a thick wool carpet in pastel pink. “People want softer finishes these days . . . and this one,” he says, thrusting a lime green sample at me. “The trends are all moving to solid colours: yellow, reds, blues, greens.”
The scene, in Carpetright’s headquarters, a warehouse in Rainham, Essex, brings to mind the metaphorical kid in a candy shop — except that Lord Harris of Peckham, although clearly in his element, is no ordinary carpet salesman. He is the multimillionaire founder of Carpetright, he is a staunch supporter of the Conservative Party, to which he has donated about £6 million, and he is a philanthropist.
Since the company was set up in 1988, Lord Harris has overseen its successful flotation on the London Stock Exchange and guided its rapid expansion across the UK and into continental Europe. Today the company has nearly 500 stores, which sell one of every four carpets bought in the UK. When the full-year results are published next week, analysts expect profits to come in at £56.4 million.
The 62-year-old chairman and chief executive shows no signs of being ready to hand over control. “I have no intention of retiring,” he asserts. Potential successors waiting in the wings include his son, Martin, who serves as the company’s commercial director. However, Lord Harris, who retains a 25 per cent stake in the business, is vehement that when the time arrives the job will go to the best man.
“It will be the best person who can do the job (of chief executive) at the time that will get it,” he says. “It won’t be Martin (simply) because he is my son. I think everyone on the board knows that and I’ve always said that.
“I didn’t put him on the board, the non-executive directors did. And I think he is on the board because he is capable of doing something and not because he is my son.”
He also insists that he has no desire to take the company private, saying that his relationship with the City and institutional investors is one of healthy mutual respect.
Lord Harris got his first taste of the carpet industry at the age of 15, when he dropped out of school after his father's death so that he could run the family firm with its three carpet stores. The move distracted him from his ambition to become a professional footballer. He rapidly expanded the company with store openings and a series of takeovers — 38 acquisitions over 20 years.
Another defining moment came in 1988, when he was bought out by Jimmy Gulliver and sold the entire 1,700-store business, by this time a listed company that had been renamed Harris Queensway after the acquisition of the Queensway furniture chain in 1977. The sale went ahead for £450 million, including a windfall of £67 million for Lord Harris. It was, he says, the defining moment of his career. Two months later, he returned to the fray with Carpetright.
Harris Queensway, re-named Lowndes Queensway, lost market share as it focused on furniture at the expense of carpets. It went into receivership in 1993, the same year that Carpetright was floated on the stock exchange.
“I was very annoyed for my family, especially for my father, at having been taken over, and the only reason I floated again was to prove that I could do it,” he says. “It taught me that if you expand, make sure you’re not going too fast. And also, stick to what you really know. We were too diversified, with textiles, furniture, carpets and electronics, so now I just focus on carpets and flooring.”
Today, the next frontier for Carpetright is Poland, which Lord Harris compares to England in the 1960s. The market there is characterised by a combination of a lack of competition and a young population in need of inexpensive floor coverings. The company is targeting a market share of 10 per cent in Poland, with plans for 20 outlets across the country in the next five years, starting with up to five stores in Warsaw by the end of next year.
Future growth in the mature British market will come from increasing its national coverage. Given its existing 26 per cent share of the market, competition authorities are unlikely to look favourably upon further acquisitions. Lord Harris, therefore, has a strategy to use the company’s scale to compete on price and eat away at the 50 per cent of the market that remains in the hands of independent retailers in small towns. Additionally, Carpet-right says that it is building up a “ very good collection” of rugs, due for sale this year over the internet.
Lord Harris is particularly determined to address the market position of Carpetright and its brand perception, which he will do via an advertising campaign in glossy lifestyle magazines and the Sunday newspaper supplements.
To first-time entrepreneurs, Lord Harris advocates simplicity and clarity of vision:
“Always have a clear vision of what you want to do. It’s very, very important,” he says. “There will always be up and down days, but have a clear vision and stick to your strategy. But if it’s not going anywhere, then be prepared to change.”
His philosophy on life is: “I like everyone to be reasonably happy and work to their best ability, and I like to help others who are not so fortunate.”
This underpins the Harris family charitable ethos. Despite his fondness for the good life — he keeps show-jumping horses, and collects art — Lord Harris, who is estimated to have a net worth of £285 million, and his family donate
20 per cent of everything that they make to charity. Contributions to date are estimated to be more than £100 million, although he says he has not kept count.
He also sponsors several City Academy schools, including ones in Peckham and Bermondsey in South London, where he grew up, catering for a total of 12,500 children.
Lord Harris sees education as the key to social change: “Its gives bright kids who lack opportunities a chance in life. It’s about motivation — the children have to be motivated. You instil motivation by making a child want to come to school, and then make him want to learn.
“No child that goes to school really wants to be naughty. If he’s naughty, it’s because he’s bored, or because he needs help. If you change one school, you lift the standards of all the schools in the area and when you do that you get less crime, less violence and you get better job opportunities.”
In response to an Ofsted report this year, which criticised the standards at the Peckham Academy as being “exceptionally low”, Lord Harris says: “I think that was completely wrong, because the academy was only going one year, and I have sent a complaint to Ofsted.
“If you buy a business and it’s very badly run, it takes three to five years to put it right, just like it takes a school three to five years to put it right.”
A former chairman of Guy’s Hospital — which he refers to as the best job he’s ever had — Lord Harris pays tribute to people who volunteer at schools, hospitals and charities: “It’s alright giving money, but more important, it’s those volunteers who actually make sure the money you give works. They might not be able to give money, but they give time and I think that's more important.”
The other main beneficiary of his donations is the Conservative Party, and last year he made headlines with his public backing for David Cameron, its leader.
“I think David is a very, very good man,” he says. “I believe he is going the right way and I will back him. I’m not prepared to say how much money I will give the campaign, but there is no reason I would stop helping the party because I believe we need a Conservative government. I think the country is ready for a change and a change of direction.”
Leader in ten questions
Q Who is or was your mentor?
A In my personal life it was my father. He got the Military Cross at 26.
Q Which businessman or woman do you most admire?
A Stanley Kalms, of Dixons. He was ten years ahead of me building up the business and he was a fantastic retailer. He was hands on. In terms of marketing, Noel Lister. co-founder of MFI, made average furniture look good, and Lord Kirkham at DFS makes reasonable furniture look very good.
Q Do you read books on management? If so, which has influenced you the most?
A I’m dyslexic so I don’t read, but I listen to books on management. But I have a clear vision of what I’m trying to achieve and I know how I want to achieve it, so I don’t follow them that much. I follow other people’s examples. Like what Lord Kirkham did on marketing at DFS and and MFI and Dixons, which was more like Carpetright in that it was hard-hitting. Carpetright is not a soft sell. The sale makes all the difference. It’s not like at Sainsbury’s, where you walk around and pick up the product, but no more.
Q Which is more important: what you know or who you know, and why?
A What’s important to me is getting on with people and making sure that people can trust me. It’s not who you know. The Guy’s Hospital job was the best job I did because it was about getting people motivated and building a team around you. It’s not a question of being an academic, but putting together a team and wanting everyone to work as a team.
Q What does leadership mean to you?
A Leadership is about leading and helping a team. You have to make sure that everyone in that team has a say and then make a decision. I don’t think we’ve ever had a vote in the boardroom in any of the companies I’ve worked at, even at Guy’s Hospital. Everyone had a say and agreed and we did it. So being a leader is about listening to the others. But you also have to have a clear vision. If you want to do something, then you should put a case over on why you want to do it . . . and if people don’t believe it’s right, then its probably not right.
Q If you could change one thing about the business, financial and commercial environment, what would it be?
A I don’t think I would change anything. If I wanted to change something, I should have done it already. If you ask me what I want, then I want to get across the story that Carpetright is not cheap. Carpetright sells 20 per cent at the top end. That is my hardest thing. I want to explain to the customer that we are in the top end and it’s our own fault that we’re not getting that across. We have to get that over better. And I do believe that’s been the biggest change in my life over the last 50 years. It was price, price, price 50 years ago and now its service, choice and price, in that order.
Q What is the most important business event, good or bad, to occur in your working life?
A The most disappointing thing that happened to me is when I was taken over in 1988. If I could turn the clock back, they could have their money back. I’d like my business back and if I was running it, I’m 100 per cent confident it would still be here today.
Q Does money motivate you?
A No. Success motivates me more. What motivates me is having good friends and I have some really good friends. I don’t get up in the morning and say I’m going to make a million pounds today. Money is definitely not one of my motivations and if it was, I would not be giving so much away. What motivates me is to make it to give it away.
Q What gadget or piece of technology can you not do without?
A I have a pen and pencil and piece of paper. And my PA — without her I would not get on. She is very important. And I have a good memory.
Q How do you relax?
A I like having friends over on Sundays. I like watching Arsenal play football. I’ve been very interested in show jumping. My wife has taken up riding now. She used to ride racehorses and now she races cars. She did seven weeks around South America in classic cars. But she’s taken up riding again and her ambition is to get into the British team. So it relaxes me when she comes home with rosettes because it pleases her. I play football with my children and grandchildren every Sunday. I also relax by talking to people about schools and hospitals and thinking about business. I’m most relaxed when I have the figures at half past six or seven on a Saturday night.
Power CV
Born: 1942 in St Albans, Hertfordshire. Raised in Peckham, South London
Education: Streatham Grammar School
Career: Took over father’s carpet shop aged 15. 1977 — bought Queensway furniture chain, forming Harris Queensway, which he then floated. 1988 — sold the company to Jimmy Gulliver. Founded Carpetright in 1991. Non-executive director of Matalan, director of Arsenal Football Club
Lives: Kent
Family: married with three sons, one daughter and ten grandchilden
Pets: two poodles
Car: S-class Mercedes
Hobbies: show-jumping, all sport, especially football and tennis
