Interview: Theo Paphitis and his right-hand man Kypros Kyprianou on their 11-year partnership

The Theo Paphitis and Kypros Kyprianou double act is 11 years old now and still going strong despite the fast-paced nature of the retail sector.

Sitting in their Wimbledon headquarters, retail entrepreneur Paphitis and right-hand man Kyprianou reflect on their time running a business and speak with envy about those starting out in the industry.

“They have their whole lives ahead of them and all that ambition we had, the enthusiasm and the passion,” says Paphitis. “They still have the whole ladder to climb and the fun and achievement of doing it.”

Kyprianou, who is group chief executive of the Theo Paphitis Retail Group and affectionately referred to by the former Dragons’ Den star as “Mr Kyp”, admits he is “jealous” of his younger colleagues’ energy levels.

Enthusiasm

Both Paphitis and Kyprianou are enthusiastic about the quality of young people entering the retail industry today.

They are quick to dismiss the notion that talented people may have been put off retail by the slew of negative headlines about employment rights within the sector including zero-hours and minimum wage.

“The talent and resilience I see in retail is second to none”

Kypros Kyprianou, Theo Paphitis Retail Group

“I beg to differ, the talent and resilience I see in retail is probably second to none,” says Kyprianou. “What has struck me is the level of resilience and commitment of the people on the shopfloor.”

Kyprianou cites the recent Tube strike in London to back up his argument.

The Theo Paphitis Retail Group, which owns Ryman, Boux Avenue and Robert Dyas, has more than 100 stores within the M25 but despite this, Kyprianou received an email from his operations directors on the day of the strike to say that all the shops opened on time.

“It is due to the commitment of the people who run the shops and treat them as if they were their own businesses,” says Kyprianou.

Morale boost

Paphitis and Kyprianou aim to nurture such commitment by making sure colleagues have fun in their job. When Paphitis rescued Ryman from administration in 1995 he took over a business where morale had hit rock bottom.

How did Paphitis go about improving the mood?

“Giving copious amounts of alcohol to everybody,” Paphitis jokes. “No, it was actually through boring things such as listening to people and what they have to say because retail is about people.”

One way fun is instilled into the retail group today is through an annual reward for the business’s best performing store managers.

Around 140 of the staff have recently returned from a week in Malta where they “played games, ate a lot, drank a lot and watched shows”.

“We put our white suits and dancing shoes on and we have a blast for a week.

It does not come out of the holiday entitlement and it is a thank you and way to get to know them,” explains Paphitis.

It is a tradition that first began 16 years ago and continued through the depths of the recession.

Origins of a partnership

Paphitis lured Kyprianou to the company in 2004 from his previous role as a corporate banker at the Bank of Cyprus.

“Theo was a client of mine in my previous job and he convinced me there was a better life outside banking,” says Kyprianou.

Prior to teaming up with Paphitis, Kyprianou says his only previous retail experience was “going to the newsagents to buy sweets”.

Paphitis says the fact Kyprianou had never been in retail was “irrelevant” because the disciplines required for retail are “clear and simple”.

“It is very hard to find new talent and Kypros certainly showed the aptitude and the interest.”

Theo Paphitis

“He was lost before and was just in the wrong job because he was really a born shopkeeper,” says Paphitis. “It is very hard to find new talent and people who are going to be the next generation and run the businesses and Kypros certainly showed the aptitude and the interest.”

The delegation of power to Kyprianou allowed Paphitis to devote more time to his chairmanship of Millwall football club.

“It was a great distraction, I loved it and we had many highs and some incredible lows,” says Paphitis. “I had a good team around me including Kypros and Malcolm [Cooke - Ryman director] and they kindly allowed me the indulgence to do it while they looked after the shop.”

Irrevocable change

Paphitis is no longer chairman of Millwall, but the pace of change within retail is more than enough to keep both him and Kyprianou busy.

“I remember when you used to see news on a monthly or quarterly basis in retail and now you have got daily developments and retailers pushing the boundaries,” says Kyprianou.

Paphitis believes retail has never been more exciting due to the amount of irrevocable change the use of ecommerce has brought.

“You could previously run your business in many ways the same way you could run it in 1945,” says Paphitis.

“After the war to 2000, there was very little difference other than you went from manual tills to the electronic cash register to electronic point of sale.”

Despite the excitement such change brings, Paphitis believes there are grave threats to the high street.

“I find it difficult that for every £1 we pay in corporation tax we pay £2.40 in business rates - that is just ludicrous”

Theo Paphitis

“I find it difficult that for every £1 we pay in corporation tax we pay £2.40 in business rates - that is just ludicrous,” says Paphitis.

“It is difficult because we have the new minimum wage increases, which I believe morally is correct but how retailers are going to be able to do it I don’t know - there has got to be a balancing act.”

Paphitis argues high street store groups could be provided relief if the Government forced etailers to shoulder more tax or if it reduced the national insurance burden.

“Other people who don’t pay rates and corporation tax and don’t employ anywhere near as many people have an advantage,” says Paphitis.

And if action is not taken Paphitis believes “you will destroy your high street and you will create unemployment and you are back to where you started from”.

While there will always be external challenges to contend with in retail Paphitis and Kyprianou are determined to maintain their focus on talent to ensure another decade or more of success at the business.