BERNARD LEWIS may have celebrated his 80th birthday this month but the retail entrepreneur has no intention of taking it easy.
After decades at the helm of the fashion retailer River Island, he is still involved in the day-to-day running of the family empire.
Lewis — who describes himself as chairman but is simply known as “Mr Bernard” by staff at River Island — still works every day and many weekends, when he and his wife, Vanessa, try to visit at least two stores.
“It’s no good looking at merchandise on a rail in the office,” said Lewis. “You have to see it in the shop. And you have always got to see what the competition is doing.”
Sixty years after he opened his first “shop” selling fruit and vegetables from a corrugated iron shed on a bombsite on Holloway Road, north London, Lewis has lost none of his drive — despite being the patriarch of an £800m empire.
While others on the high street struggle, River Island has gone from strength to strength.
Like-for-like sales across the high street may be falling, but River Island is believed to have had double-digit increases in the past 12 months at its 200 stores. The latest accounts filed at Companies House show that pre-tax profits rose 47% to £81.5m in 2004.
Late last year the family demonstrated its confidence in the business when it opened its largest ever shop at Bluewater, the regional shopping centre in Kent.
Lewis has always shunned the limelight, yet despite the low profile few in the retail industry make the mistake of underestimating him.
Philip Green, the owner of Arcadia and BHS, describes him as a brilliant retailer. “He is an old-style dyed-in-the-wool retailer, which they don’t manufacture any more,” said Green.
But while Lewis has made it clear that he has no intention of standing down, his 80th birthday has prompted some in the industry to ask — where next for the retailing dynasty?
Fruit and veg had always been the Lewis family business. During the second world war the family sold their wares from the back of a lorry. When Lewis left the air force in 1946 he opened his greengrocer’s shop at 478 Holloway Road — today the site is a River Island store.
But within two years of opening his greengrocer’s he had realised that his future did not lie in cabbages and carrots.
“There were two things I did not like about the grocery trade. First, I had to get up at 5am to go to freezing Covent Garden or Spitalfields market and, second, the product is perishable.
“However perishable fashion is — and it is perishable today — it lasts more than a day. Once you have bought perishable soft fruit, you can buy anything,” said Lewis.
So in 1948 Lewis — and his brothers David, Godfrey and Geoffrey — opened “Lewis” a womenswear shop in Mare Street, Hackney, east London. Within 10 years they had a chain of shops across Britain with stores in Brighton, Hull and Glasgow as well as London.
But the expansion was not all plain sailing. In a rare interview last year with Drapers Record — the fashion industry bible — Lewis recalled how tight finances were in the early days.
“I went into a wholesaler on Margaret Street called M Duke from whom I bought a lot of goods. It was a Thursday afternoon, half-day closing for us. He was very embarrassed and told me that I had reached my credit limit.
“So I took out a cheque book and wrote him a cheque knowing it wouldn’t be cashed until Monday, by which time Saturday’s takings would have been in the bank,” he said.
By 1980 Godfrey and Geoffrey had left the business and most of the shops had been rebranded as Chelsea Girl. It would not be the last time that Lewis reinvented the retailer. In 1988 River Island began to replace Chelsea Girl.
Richard Hyman, chairman of Verdict Research, the retail consultancy, believes that the reinvention of the brand is one of the reasons that Lewis has survived while so many of his high-street rivals have faltered.
“They have invented three separate businesses, transforming Lewis Separates into Chelsea Girl and Chelsea Girl into River Island,” said Hyman. “The timing has been impeccable. Bernard has a natural instinct. You cannot teach timing like that at business school.”
By the early 1990s Chelsea Girl was no more, replaced by River Island. The business went from strength to strength, driven by Lewis and his eldest son Leonard.
Over the past decade River Island’s success has enabled the Lewis Trust Group — the family’s ultimate holding company — to pay hundreds of millions pounds in dividends.
Eleven members of the family, an Israeli company and Guernsey-based offshore trusts now own stakes of between 3% and 18% in the business. According to accounts filed at Companies House, over the past 10 years the Lewis family has benefited from payments of more than £100m.
Members of the family also appear to have profited from the sale of old debts due to its banking subsidiary — Consolidated Credits Bank. In what seems to be an extraordinary deal 10 members of the Lewis family bought £59m worth of debts for £859,650 in 1996.
The success on the high street has enabled the Lewis family to invest in property and other businesses and the family empire now extends much further than River Island.
While Lewis concentrated on the retailing business, his older brother David managed the family’s wider interests — although he has since retired from day-to-day involvement and now lives in Israel.
Lewis Trust Group owns hotels in Europe, Israel and America. The group’s 11 Israeli hotels — eight of which are on the Red Sea — generated turnover of £59m and £1.1m profit in 2004.
So what has been the secret to the success? Lewis insists that there is no secret — “simplicity and focus, consistency and the best possible people” is what he puts it down to.
Rivals believe there is a bit more to it than that. Lewis was one of the first retailers to bring design in-house and to move production overseas.
Hyman also puts much of the success down to Bernard’s drive. “He is still as driven today as he was 60 years ago. They are at the top of the premier division of truly great retailers. They are a remarkable company, run by remarkable people.”
Inevitably, though, mistakes have been made.
The Lewis family has always given generously to good causes — setting up a number of trusts and charities.
But an extraordinary bungle by Birth Defects (Trading) Ltd — the trading arm of a charity closely associated with the family — led to a £555,613 tax bill in 2004.
“Routinely the company’s profits are donated to Birth Defects Foundation (a registered charity) under gift aid. Since the end of last year it has come to the attention of the directors that a payment for gift aid was made more than nine months after the accounting period to which it related and in which tax relief is claimed. This has resulted in the above corporation tax charge,” stated a note on the accounts.
A genuine error or the first signs of cracks appearing in the empire? “It resulted from an unfortunate illness within the management of the charity. The Inland Revenue was sympathetic but had no discretion to waive the tax,” said Lewis.
Today River Island is no longer solely run by the Lewis family — the retailer’s long-serving managing director, Richard Bradbury, is an outsider. But the family is still heavily involved, with at least six Lewises working in the business.
Vanessa, Lewis’s 60-year-old second wife who joined the firm as a buyer in 1970, is the product development and image director and Clive, Lewis’s son, is chief executive.
Ben, David’s son, has been with the firm for nearly 20 years and heads retailing, IT and and logistics.
Lewis insists that succession is not an issue. “The next generation are aged between 40 and 50. They have been in the business for 20 to 30 years and have run most of it for many years,” he said.
Having created an empire, Lewis is convinced that the next generation has the ability to ensure that it continues to prosper long after he steps aside.
But rivals are not so sure. Lewis, they claim, is still the driving force in the business.
As the Cohen family discovered at Courts and the Sainsbury clan have learnt to their cost, the most carefully built dynasties can quickly crumble.
The firm at a glance
THE Lewis family opened its first shop, a greengrocery, in Holloway Road, north London, in 1945 and in 1948 moved into clothing, with a shop in Hackney, east London. By the end of 2004 it had 209 River Island stores with retail space totalling 778,000 sq ft. It accounted for 1.2% of the overall UK clothing market and 1.9% of the menswear market. River Island employs more than 1,850 full-time and 5,200 part-time staff.
Apart from the fashion business, the group also has substantial hotel interests. In Israel it runs 11 hotels, including the Isrotel Tower in Tel Aviv and a string of Red Sea resort hotels. In Spain it operates eight hotels and two apartment buildings with a total of 2,764 bedrooms. In the US it has three hotels, two in Florida and one in Georgia.
