I'm not envious, says the one Burton Boy who has yet to make his retailing millions

Business Profile: House of Fraser's chief executive has a reputation for being a smooth talker, but his company remains an under-achiever

John Coleman is suffering from a croaky voice that is playing havoc with his usual silky patter. The chief executive of House of Fraser usually gabbles away nineteen to the dozen. But a cold has rather cramped his style. "I've had it for days," he says in a Glaswegian accent. "It seems to be hanging around."

Despite his ailment, the head of the department store retailer, which includes Dickins & Jones, Army & Navy and Barkers of Kensington, is looking as dapper as usual. Short and stocky with grey hair and pale grey eyes, his attire has been put together with care with a ruby red tie matching the pinstripe in his grey suit.

He's a relaxed talker, smooth and slick. Sometimes a little too slick, some say. But then he is one of the Burton Boys who learned his trade at the knee of Sir Ralph Halpern in the "boom boom" days of the 1980s. In his 10 years at Burton, Mr Coleman ran Top Shop, Top Man and Dorothy Perkins. His peer group included Stuart Rose of Arcadia, Terry Green, formerly Bhs and Debenhams, and Angus Monro, ex-Matalan. Those three are now considered a retail Holy Trinity who have all made millions over the past couple of years. But Mr Coleman, 50, has not. Does this rankle with him?

"No, not at all," he insists. "I didn't set out saying 'I want to get rich by this time or that time'. Obviously one wants to be decently paid for what one does. But I actually think I have a great job right here."

What was it, though, about Burton Group that spawned this generation of high achievers? "Retail was sexy in the 1980s," he explains. "It was dynamic, fast moving and a place where you could make a name for yourself quickly. And Ralph was a visionary. I enjoyed working with him. There were negatives, too. He could be paranoid, seeing monsters which weren't there. It could be a political place."

Asked about Mr Rose's £25m windfall from Philip Green's takeover of Arcadia, he claims he is not envious. "Good luck to him. I'm due to buy him dinner soon. I must be the only person who is buying him dinner, but it's my turn. I saw Terry Green recently but I haven't seen Angus for a long time. He spends most of his time in the north."

While Messrs Rose, Green and Monro have become the Midas-touch men of the high street, Mr Coleman has struggled to make such an impression. House of Fraser has developed a reputation as an under-achiever and is still rather cruelly referred to by analysts as House of Failure. Perceptions of Mr Coleman are mixed.

"He's a nice guy who is great in presentations," one colleague says. "He can definitely talk the talk, but can he walk the walk?" The City reaction to last week's half-year results underlined the difficulty Mr Coleman is having in changing that view.

The figures were actually quite good. Though losses doubled to £2.7m, before exceptionals, this was due largely to disruption at its Birmingham store which is being refurbished. Like-for-like sales were up 3.7 per cent in the half and 2 per cent in more recent trading. And compared with rivals, the group was quite optimistic regarding the outlook. But still the shares fell on fears of a dividend cut and the view that when the going on the high street gets tough, House of Fraser will struggle.

Mr Coleman acknowledges the image problem. "If you look back to the float of 1994, the business was floated at 180p [a share] and pretty quickly lost its way from there. A lot of people in the City got their fingers burned. But this is new management who, by and large, have performed. I can't think of anything we've done that has been offensive to anyone."

He claims House of Fraser has been hamstrung by the legacy of the float which saw Mohamed al-Fayed keep Harrods but float the rest of the group for £413m. "If you look at the state the business was in it had a collection of under-invested stores, an uninspiring product mix and very few aspirational brands. On top of that there was a pretty poor supply chain and no store opening programme. We've always been a little constrained by the balance sheet. Unlike Debenhams and Selfridges which floated with a lot of the hard work done, we've had £100m of debt."

Mr Coleman says he has never spoken to Mr Fayed and hasn't had much contact either with Brian MacGowan, the former Williams boss who was paid £1m to chair the group and guide it to the market. "I was relatively inexperienced with the City when I took the job. I did my due diligence, but there's only so much you can do." Asked if he would have refused the position if he knew then what he knows now, he says not. "I wanted a plc chief executive job."

Having been dealt a poor hand of cards, Mr Coleman reckons he has played them well, despite a share price that now stands at 50p, having halved since April. "I'm certainly happy with the underlying performance of the business. If you think about it, when I joined six years ago the business was making pre-tax profits of £14m. It should make £25.5m this year. That's double-digit compound growth. I think that's pretty good." He points out that under his guidance House of Fraser has refurbished dowdy branches such as the former DH Evans on Oxford Street (now rebranded as House of Fraser) and Barkers. He also claims a "house of brands" strategy similar to Selfridges, which has seen House of Fraser's 48 stores introduce names such as Victor Victoria, Fendi furniture, Anne Klein and the UK's first Mango concession.

As for the future, it is unclear where this former Glasgow Rangers turned Arsenal supporter can take House of Fraser. The strategy is 20 more stores through organic growth but the rumours of a deal refuse to die. Three years ago the company was close to a tie-up with Allders but talks broke down, partly due to disagreement over who would run the enlarged group. Bid talk has reared its head again after Allders' profits warning. "Listen, we don't need a deal." But then he leaves the door open. Asked if consolidation in UK department stores is inevitable, he says: "It's not inevitable. But it is desirable."

JOHN COLEMAN TALKING THE TALK

Age: 50

Pay: £871,373 last year including £364,740 salary, £274,000 annual bonus and other benefits.

Education: Hynd Land senior school, Glasgow; University of Glasgow (accountancy and economics).

Career record: 1974-79, Procter & Gamble, financial analyst; 1979-83, manager at Oil Tools International; 1983-93, Burton Group, ending up as managing director of Dorothy Perkins; 1993-95, chief executive of Texas Homecare; since 1996, House of Fraser, chief executive.

Interests: Football (he supports Arsenal), music, opera and wine. "I cycle a lot but I don't read as much as I used to."