UK: STANLEY KALMS - PROFILE. - It's a novel approach to take with an interviewer. `Why do you want to talk to me?' moans Stanley Kalms, shuffling the papers on his desk, coming over all curmudgeonly. `I'm Yesterday's Man. I'm not important. You should tr

Last Updated: 31 Aug 2010

It's a novel approach to take with an interviewer. `Why do you want to talk to me?' moans Stanley Kalms, shuffling the papers on his desk, coming over all curmudgeonly. `I'm Yesterday's Man. I'm not important. You should try someone else.' The 63-year-old chairman of Dixons, 40-odd years in the job, pats his tie and nervously runs his fingers round his shirt collar as he sits down. His sudden transformation into the Eeyore of British retailing seems rather out of character.

For Kalms, multimillionaire founder of the country's largest electrical store chain and one of the surviving legends of the high street, is normally anything but reticent. A man reputedly so finicky about detail that he can still spot a wonky Dixons sign at 100 metres, and so tough on his colleagues - if anecdote is to be believed - that he regularly chews up young managers for breakfast (the two are often connected), Kalms has achieved a reputation for shrewd single-mindedness unequalled in his industry. As if overseeing his 10,000-employee empire with a turnover of over £1.5 billion wasn't enough, he also, among other interests, chairs a hospital trust and sits on the board of the Centre For Policy Studies, the key Conservative Party think-tank. Yesterday's Man he is not.

But experience has probably taught him caution. Retailers come and retailers go, and being a naturally flashy profession, they tend to attract profile whichever way they are heading. Of all the big names in the '80s - Halpern, Davis, Mirman, Harris, Conran - only Kalms has survived with his empire more-or-less intact. Recent years have been tough for Dixons (last year it lost £165 million due to goodwill written off after selling its American arm) but, when we met, Christmas was coming and things were beginning to look up. Kalms, swiftly overcoming his initial bashfulness, was keen to accentuate the positive.

`We had an easy period, then a hard period,' he says, trying to sum up where the company stands. `It happens to everyone. Now we are coming out of the difficult period and into the best years. We've got the benefit of accumulated capital and wisdom and reputation. It's a tough market but we have probably never had a better share, and never had so many things going for us as we have now. I'm very bullish.'

That, as Kalms's colleagues will testify, could be his middle name. A big man, in heart if not in height, Kalms has always overwhelmed others with his enthusiasm and verve. It has been, he says, the secret of his success. When others tire, he keeps going. With his lugubrious, slept-in face, bushy dark eyebrows and grey hair, he looks older now, and has put on a bit of weight, but the drive is still there. He talks with his arms, waving them about to illustrate every point, and has a rich, deep voice, with a distinctive north London Jewish timbre. Occasionally, between points, the arms come to rest over his small paunch but the hands never stop fiddling, with his tie, with his collar, with his buttons. At times he is the picture of restless energy.

He sits uneasily behind a desk in his third-floor Mayfair office, the place chintzed up with prints and repro furniture like an expensive hotel room, a million miles away in style from his busy shops. You would have to say he looks a bit out of place. He agrees he likes nothing better than getting out, pounding the shop floor or quizzing his backroom staff. His favourite gambit is telling them something is rubbish and making them argue against him, but the tactic once famously backfired (a product buyer misinterpreted the technique and, petrified, dropped a potential bestseller), so Kalms is more cautious these days.

That probably goes for the company, too. Analysts have been impressed with the way Kalms has handed over day-to-day control of the 1,500-shop empire to chief executive John Clare, something which some of them thought would be alien to the very core of Kalms's nature. He still controls strategy, and retains a very `hands-on' chairman's role, but now he only gets immersed in some of the detail, not all of it, according to colleagues. The changes appear to be working. New shop formats are looking good, staff are being trained more thoroughly and staying longer. Silo, Dixons' disastrous American retail investment, has finally been sold off, the company has pulled out of UK property, and at last it may be poised to break the £100 million profit plateau it has targeted for years but never quite managed to hit.

The flip side, however, is that the company is still a long way from the heady days of the mid-'80s, when it outshone most of its rivals on the stock market. The share price remains below its 1986/87 peak and other retailers, its peer group if you like, are distinctly cool about its recent performance. Dixons, say some, would be in a parlous state if it wasn't so good at selling extra warranties on equipment. Others blame the electrical market. `The problem is that Dixons is running up a down escalator at the moment,' says Nick Bubb, retail analyst at Morgan Stanley International, `but relative to Comet and the regional electricity com-panies, it has done brilliantly.' And the magic word `multimedia' is just beginning to tickle Kalms's fancy.

`I'm very excited about multimedia,' he says, fidgeting in his seat. `It's a sensational new product. I think if you are a parent you haven't got a choice, you have got to look at it. And at the moment it's not that expensive if you look at what you get with CD-Roms.' Then there's the new mobile phones, new television technologies, new small audio products. Oh yes, says Kalms, whose ability to spot great products is renowned in the retail world, it could be a very good Christmas indeed. The 13-week run-in to 25 December is now crucial to the company's annual results. `The whole year is built around peak season,' he says excitedly. `Peak is peak is peak! We make two-thirds of our profits at least. Everyone will be watching those figures!' Kalms gets the weekly sales totals phoned through to him every Saturday night at 8.30pm, wherever he is. It's going to be good, he says, as excited as a Labrador. Perhaps he has sniffed something in the wind.

No one is sure where he gets his nous from. You are just born a retailer, he says. John Clare, who was previously in charge of the Dixons wing of the empire (the others are Currys, PC Superstores, and a European property division), insists Kalms's insight is extraordinary. `He could walk into any store and find 10 different ways to improve business, however successful it was.' Kalms himself says he is `the great plagiariser', forever looking at others to see what he can learn. His lucky breaks were getting into the Far East early, in the '50s, and realising what an `El Dorado' of new products was waiting there. That, and not going belly-up in the greedy '80s, like some of his rivals. But most important of all he understands shops better than anyone else of his generation.

That is where he is happiest, looking round, chatting, picking up ideas. `My wife will tell you that going out with me in the first 10 years of our marriage was agony. I had to stop at every competitor, get out the car and look in their window.' He still does it, and gets to as many Dixons, Currys and PC Superstores as he can in a week, too, often just popping in unannounced and forcing an assistant to sell him something. They usually recognise him, he chuckles, because his photo is plastered over the company newsletter. Being a Dixons manager, you would think, must be a pretty nerve-wracking business at times.

But it always was. Kalms, it is important to point out before succumbing totally to his charm as the grand old man of British retailing, can be a difficult person to work for. He admits himself that he was `unpleasant' on the way up, and pretty demanding once his empire was in place in the '80s. He made some bad decisions - the failed takeover bid for Woolworth, the purchase of Silo - and trampled on some egos along the way. The tantrums, the shouting, the impetuousness are all legendary within the industry. Certainly some think there is still a bit of MBT (management by temper) going on inside the company, but Clare, for one, groans when I put it to him. He describes the culture as `competitive' and Kalms himself as no more temperamental than anyone else he has worked for (intriguingly Clare, whose previous jobs were at Ladbroke and Mars, has only ever worked for founding chairmen).

But what is disarming about Kalms is that he acknowledges it all, and say he wishes he hadn't been so single-minded on the way up. His obsession now is `giving back' to the community, using his wealth to fund various health and educational projects.

He is not short of a bob or two: his current salary stands at £598,000, and has been there-abouts for the best part of a decade. He owns three million shares in the company, has options on 659,000 more and is renowned in the City for twice selling off large tranches of Dixons stock just before a share price slide - so he knows when to cash them in. The current beneficiaries of his largesse (aside from the Conservative Party to which he has privately given over £100,000) are colleges in Britain and Israel, his pet projects being study centres investigating business ethics and social responsibility. Critics can make of that what they will.

Is he troubled by the ways of business? `No,' he says, `I don't think buying and selling is an ethical problem, but I recognise the massive conflict in large businesses between your responsibilities, and it's good to find a forum where ethics can be discussed.' His friends say that, for all the bluff exterior, he is a prodigious thinker. `The thing about Stanley,' says Lord Griffiths, chairman of the Centre For Policy Studies and a self-confessed Kalms fan, `is that what you get is always the result of a lot of work. He may sound slightly abrupt but he's usually done a lot of thinking about the particular subject.'

Kalms says he has always been influenced by religious ethics - he is orthodox Jewish - even in his `most aggressive' days. `Oh, it sounds so pompous all this, and I would never have said this unless you had raised it, but in all my most testing, demanding times, religion has helped me immeasurably. It has set the standard.' Has he ever suffered from anti-Semitism? `No, it's a good question though. I've never encountered it, but that's why the standards are there. It's a strong Jewish characteristic: never let yourself be criticised for unethical behaviour, whatever else they may say about you.'

Many of the values he picked up came from his father, whom he describes as a `small-time entrepreneur'. Kalms senior ran his own ad agency, Rego Advertising, selling space on London Underground, before picking up a photographic shop in Southend pre-war as part of a bad debt. He bought the name Dixons `off-the-shelf' - Kalms jokes they were going to call it Kodak but someone got there first - hired others to run it, and bought another shop in Edgware. When the war finished, Edgware was all that was left. A couple of years later, young Stanley left school at 16 determined to help his father run it. The empire was born.

The extraordinary thing, says Kalms, is that his parents didn't really want him to build a retail empire at all. Neither of his parents, both first-generation immigrants from Eastern Europe, were that ambitious, and certainly were not responsible for the extraordinary drive with which Kalms pushed himself. To this day he is still not sure what motivated him. His is hardly a rags-to-riches story. `I had a comfortable, middle-class background. They didn't bring me up to be successful,' says Kalms. Quite the reverse. He says he can still hear his father, who died some years ago, asking him: `Why do you want to open a shop in Scotland? Haven't you got enough?' Likewise when he bought his first boat - Kalms is fond of boats - his mother couldn't understand it. `What do you want a boat for, darling? You've got a nice garden.' He laughs as he remembers, and then looks thoughtful. You can tell he has now reached that age where those kind of memories are often unbearably poignant.

`I had a very easy life, I was just on a roll from day one, and I haven't stopped rolling to this day. You keep going forward, nothing stops you being successful so you keep on going,' he says, trying to explain it all. `I see the same characteristics today in some of the young tycoons-to-be, the slightly glazed look, the single-mindedness, the lack of a natural philosophy. It's probably true of anyone who is single-minded enough to build up a substantial business. Perhaps you have to be like that. The pity is you can't be like what you are today, then. There's a whole world out there.'

Yet the young Kalms wasn't really interested in the outside world, except as a source to buy goods from and a location to put his shops in. He borrowed, he bought, he built. He schemed clever ways to get round retail price maintenance - free books, cheap credit - he was the first into the Far East, first into own brands, and he rode the wave of technological revolution that bought cameras and televisions, then hi-fi and washing-machines and dish-washers and appliance after appliance, gadget after gadget into modern British homes. He floated Dixons on the stock market in 1962, snapped up Currys in a hard-fought £300 million bid battle masterminded by Roger Seelig (later to star in the Guinness trials) in 1984. `Currys,' says Kalms now, `was one of the deals of the century.'

His next ones weren't. An aggressive bid for Woolworth (now Kingfisher) collapsed, and an impetuous one for Silo in America succeeded, and proved to be the worst mistake Kalms ever made. He paid £240 million for Silo in 1987, whereupon it promptly started to lose money at an increasing rate. By the time Dixons managed to get rid of it, giving it to American retailer Fretter in exchange for a substantial stake in the company, most at head office were glad to see it go. Then there was the Kingfisher counterbid for Dixons over 1989/90. One way or another, the City made rather a lot out of Kalms in the '80s.

Does he blame his advisers? `No,' he says. `Advisers are to advise and managers manage. At the end of the day those decisions were mine and the board's.' Others suggest that, inside Dixons at least, Kalms has made an effort to distance himself from the Silo acquisition, leaving others to carry the can. Then of course there's the matter of relations with Geoff Mulcahy, the Kingfisher boss. After bid and counterbid, many presumed it wasn't just business between the two of them, it was personal.

`There was a bit of needle when we were making the bids,' he acknowledges, `but we're good friends now.' If he had taken the wrong advice in making his initial bid for Woolworth, Mulcahy, he says, had taken it `in spades' making the counterbid. `He had no chance whatsoever of getting it. It was just a time-consuming and expensive exercise.' He reckons the two companies must have spent about £40 million in fees on both bids. Will it happen again? He grins. The logic of combining Currys and Kingfisher's Comet may be insurmountable, but so are the monopoly rules. `We're just too big in our own markets. No one wants it today. Geoff is content to be number two,' he says with a twinkle. `It might irritate him but that's a fact.' Mulcahy, when I put it to him, replies mischievously that he would never rule anything out.

What irritates Kalms at the moment is the behaviour of the newly privatised regional electricity companies (RECs), which have expanded their retail interests. He nearly explodes when the point is brought up. `Wrecks is the right word for them. It's totally destructive, throwing good shareholders' money after bad.'

ut surely it's pretty good for the consumer to have more competition on the high street? Kalms will have none of it. `They are making losses at the rate of knots and behaving irresponsibly in the marketplace. They say "let's diversify" so they go into retail. I can't think of any business that is a utility that throws money at something it can't possibly succeed in. The RECs have no skill and no competitive advantage whatsoever! The only reason they went into it was because the old electricity boards had showrooms. It defies logic.' Whatever else they have done, clearly the RECs have succeeded in getting under Kalms's skin.

Still, with over 40 years in the job you would think he had seen it all. Everyone, of course, wants to know if he will ever step down. Will he be chairman forever? The question provokes much um-ing and ah-ing and a lot of tortuous twisting in the seat.

`Hmm, it's, er, not easy to answer,' says Kalms. `I don't think you can analyse it yourself. The board has come to its conclusions and, um, I would expect to remain chairman for a substantial period ahead, yes. I'm running on all cylinders at the moment therefore the question is a little bit academic. My sons are not in the business, so I don't see it as a dynasty. I am happy to let the business decide the future.'

Yet Kalms still is the business, in many people's eyes. So he will keep waiting for his Saturday-night sales totals, keep funding his causes, keep eyeing the opposition, buttonholing his own staff. He is not a man famed for his extravagant leisure pursuits, though there is his latest boat, all 30 metres of it, parked in Antibes in the south of France. Ah, a gin palace? Kalms looks hurt. `I don't drink gin. You might call it a gin palace but that's a little bit unkind. It's just a comfortable boat where I and the children can get a bit of privacy.' As well as his home base in Stanmore, he also has a house in Israel which he tries to get to for a week a year. Real home, though, you suspect, is just any branch of any of his shops in any high street or out-of-town development.

As I make to leave, the interview over, he stops me and says he is worried. `I tend to think this has all sounded a little bit smug. I'm conscious of that and I didn't mean it that way. But when you've been at the top for 45 years in the same company it's hard not to say: "Look what I have done".' Hard indeed. I promised him I would make that clear.



Born Hendon, 21 November

Educated Christ's College, Finchley


Joined Dixons, a one-store family business owned by his father, Charles Kalms


Company floated as Dixons Photographic Ltd with Kalms as managing director and his father as chairman


Charles Kalms dies; Stanley Kalms becomes managing director and chairman


Dixons buys Currys


Dixons makes failed bid for Woolworth


Dixons buys Silo


Kalms steps down as chief executive but retains chairmanship; Dixons becomes bid target for Kingfisher


MMC rules out Kingfisher bid


Sells Silo


`Stanley is a very experienced and successful entrepreneur. He's probably almost unique in that he's maintained that role in a group that has become a large and sophisticated machine.' John Clare,

Dixons, 1994

`I don't think Kalms has ever won hearts and minds in the City, but he is seen to be a pretty shrewd judge of the worth of his own shares.'

Analyst, 1994

`He's extremely energetic, he gets after the merchandise, and he sells it very aggressively. He's got what it takes.'

Geoff Mulcahy,

Kingfisher, 1994

`He is a very shy man. I think his aggression may come from his shyness.' Pamela Kalms,

his wife, 1990

`Deep down he is a very caring man. If Stanley gave you a bollocking you knew he cared.'

Nigel Wilson, Stanhope Properties, 1990.

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