Taking the business by the throat

Profile: Roy Bishko; Tie Rack's founder has fought through boom and bust to build a successful global empire. Patrick Hosking reports

There was a moment in 1980 when Roy Bishko wondered whether he was cut out to be an entrepreneur. Then the proud owner of seven tiny shoe-repair shops in London, he paid an unexpected visit to his branch in the Strand. There he found an immobile queue of impatient customers. The solitary cobbler was so drunk he could barely connect hammer with nail. And the indifferent shop manager was next door in the pub.

Bishko's We Heel shops were never a success, but they sowed the seeds of something that was. He had started selling sandals, T-shirts and other clobber in the shops as a sideline to the main business of shoe repair. But he found that whatever the product he experimented with, he wasn't competitive.

"I decided I had to find something where I had an edge," he recalls in his clipped South African accent. He eventually alighted on ties. "I'd always loved silk ties, but could never afford them, except when Harrods were having a sale." He bought a batch from a wholesaler and priced them at cost. His first ties retailed for pounds 3.99. "They sold very well and I realised we had something."

Thus Tie Rack was born. The retail chain now has 380 shops in 26 countries. There is barely a major international airport that doesn't boast at least one Tie Rack. The outlets are small, but they generate some of the most mouth-watering sales-per-square-foot in retailing. And Bishko, who brings out 1,300 new tie designs a year, has undoubtedly widened the tie-wearer's repertoire: anything from Donald Duck to the paintings of Carel Weight can appear on his ties. His latest wheeze is a range of Olympics ties and boxer shorts launched to coincide with the Games in Atlanta this year.

After a disastrous period in 1989-90, Tie Rack is again prospering. Bishko last week was able to announce a 7 per cent increase in pre-tax profits to pounds 7.9m on sales of pounds 97m.

He is intensely proud of the business he has built up. Framed ties decorate the walls of his office. A short man, he bristles indignantly when Tie Rack is described as "a niche retailer" - a derogatory term, he insists, because of the demise of Sock Shop and the Mrs Field's cookie-shop chain. He has a corrective letter he sends automatically to anyone who so describes Tie Rack.

But after delivering a 15-minute sermon on the failure of the media to understand his company, he lightens up. He becomes amiable, frank and garrulous, his conversation littered with anecdotes and asides. He gesticulates generously to make a point. And he quotes liberally and eclectically - Longfellow, Mark Twain, Jack Nicklaus, Bob Hope and Mel Brooks. He is a fanatical reader. A well-thumbed copy of Nelson Mandela's autobiography, complete with annotations, sits on his desk.

He is a bit of a jackdaw about quotations and unusual objects. Colleagues coming into his office recently were amazed to see a 1950s- style car roof-rack complete with old-fashioned suitcases. It turned out to be a musical sculpture designed to appeal to those nostalgic for old- fashioned holidays. Bishko loved it.

Owning 5 per cent of the business, he is worth at least pounds 4m. But apart from a gleaming Mercedes, his tastes are quite modest. Head office is a no-frills warehouse building in an industrial park beside the M4 in west London. His own office is spartan, and currently cluttered with new- fangled suitcases - Bishko is piloting a new retail format, Rolling Luggage, in London's Waterloo Station and Heathrow Airport.

A facsimile newspaper billfrom 1987 - "Tie Rack Shares Stampede" - sits in the corner. It is a constant reminder of the company's spectacular flotation. It was an insane time when the Stock Market was fizzing and one-product retailers were all the rage. An insatiable public subscribed for the shares 85 times over, despite an astronomic price of 145p - 32 times earnings.

Of course the hangover arrived swiftly, sped on by the October 1987 crash. The shares fell and continued plunging as Tie Rack over-expanded in the US and came to grief with some of its franchisees. By the end of 1990, the shares had collapsed to just 15p.

In those dark days, Bishko set about slashing costs, especially in the US, where a hefty infrastructure had been set up and had to be dismantled. "I flew around like Biggles trying to see all the landlords in the US. The whole thing was a nightmare."

Eventually a chastened Tie Rack was back on track. It had to go back to its shareholders for more money, and for years there was no dividend. But now the prospects look sunnier than at any time since the flotation. The format works well in airports, and, with air travel expected to grow dramatically, the company looks well placed. Bishko also has great hopes for Japan, where he recently opened three stores in partnership with Fujita,which is also the Japanese joint-venture partner of the burger-chain McDonald's. "My feeling is that Japan will be bigger than the UK (where there are 169 branches) in due course," says Bishko.

Ambitious stuff - and a world away from the South African town of Bloemfontein, where Bishko, now 52, was born and raised. His grandparents were Jewish exiles from Russia. His father was a dentist, his mother a music teacher. Both were keen investors. "They used to listen to the stock prices on the radio at lunchtime. I became very interested in business."

It was a comfortable, middle-class upbringing. Apartheid was in full force. Bishko remembers when he was just seven issuing a pass to one of the family's black servants so he could be out after the 10pm curfew. Academically his school performance was satisfactory, he says, but his love was sport. At 16 he damaged his knee playing football - an injury that was to prevent him doing national service but that triggered his love affair with the less energetic sport of golf.

He was all set to follow in his father's footsteps as a dentist. In school holidays he helped make false teeth. But he discovered it wasn't for him when he was put to work dissecting frogs at Johannesburg University. "I realised I was trying to fit into someone else's scheme of things."

Inspired by courtroom movies like Witness For The Prosecution, he switched to law, and after university joined a local law firm, Wertheim Becker. He qualified as a solicitor at 23, but soon decided he wasn't going to practise. His experience advising corporate clients had convinced him he wanted to be on the other side of the desk.

He joined Schlesingers, a private banking, finance and insurance group as a letting clerk, finding tenants for office blocks and shopping centres. "I knew absolutely zippo," he recalls, but he prospered and was rapidly promoted: "I learnt that there weren't many guys prepared to come in at any time - nights, weekends, whatever." The hard work paid off. Age 26 he was packed off to set up a Cape Town office. In 1972 he was dispatched to London to establish a UK operation. "I was young and it was a great adventure."

He and his wife Barbara, whom he married in 1969,arrived in London just in time to take a ride on the boom-and-bust commercial property switchback of the early 1970s. When Schlesingers took control of Dorrington Investment he became a main board director: "I was terribly proud. I really thought I'd made it." More property deals followed, but he had seen a property bubble burst in South Africa in 1969 and felt uneasy. "I knew there was something terribly wrong. Whenever I tried to buy some property there were always queues of people." Sure enough, along came the bust and the 1974 secondary-banking crisis.

He carried on working for Schlesingers but became disenchanted with property and decided to start up on his own - hence the ill-fated heel bars.

Outside business, he loves movies, music and above all golf. His golf swing is his obsession. In his garden in the west London suburb of Ealing - next door to Neil Kinnock - he has a golf net, spotlights and a video camera so he can analyse his technique. He takes copious notes after golf lessons. "My life's ambition is to get a good swing," he claims. He once had a handicap of five, but now plays off 11.

Those who know him well describe him as passionate about the business. "He doesn't have many low gears - he's always racing flat out,"says one. His bouncy, Tiggerish style hasn't always gone down well in the City. But he is balanced in its view by the caution of his accountancy-trained chief executive Nigel McGinley. Tie Rack has come of age.