retail

The rise and fall of Philip Green’s Arcadia retail empire


The expected collapse of Arcadia into administration on Monday brings down the curtain on three decades during which owner Philip Green attracted both admiration and opprobrium for his combative approach to business.

His career, which started with his selling surplus stock from a store called Bond Street Bandit, will be remembered chiefly for its dealmaking, often audacious and ruthless in equal measure. He made big decisions quickly and often persuaded backers — ranging from the secretive Barclay twins to leading high street banks — to lend huge amounts of money at short notice.

In his early days, his bold moves were rewarded with rapid and often spectacular returns. The break-up of Sears, which he took over in 1999, resulted in a profit of almost £300m, while the refinancing of Arcadia in 2005 resulted in a £1.2bn tax-free dividend to the Green family.

Sir Philip’s retailing ability is more hotly debated. “This idea that he had a Midas touch is nonsense,” said one person who has worked with him. “He is not strategic at all, there is no long-term plan.”

This person added: “He’s a rag trader. He buys things cheap and sells them more expensively. He’s very good at it and it made him very successful.”

Another person who has locked horns with the tycoon several times over the years said he appeared to “sit back and milk the cow” after his second attempt to acquire Marks and Spencer, in 2004, was unsuccessful.

File photo of Philip Green in a What Everyone Wants shop in Glasgow © FINANCIAL TIMES

Retail commentators say there was little in the way of investment in Arcadia’s main brands of Topshop, Burton and Wallis, whose market share has declined precipitously since their heyday in the early 2000s.

Sir Philip was put off ecommerce by the heavy investment required, allowing rivals such as Asos and Boohoo to grab market share among younger consumers.

Meanwhile on the high street, Arcadia’s brands were undercut on price by the likes of Primark and faced an onslaught of competition as H&M and Zara expanded in the UK. His own attempts to open stores overseas had mixed results.

As Arcadia’s decline gathered pace, senior executives and potential new hires became less willing to indulge his abrasive personality.

Sir Philip’s attitude towards bankers, suppliers, staff, analysts and journalists “definitely had an effect” on recruitment. the former associate said, adding that he was increasingly reliant on longtime lieutenants such as Ian Grabiner, Arcadia’s chief executive since 2009.

“[Those people] might be prepared to put up with the shit but that doesn’t mean they’re the best people to run those brands,” the person said.

Sir Philip’s reputation was also dented by the months of bitter recriminations that followed the collapse of BHS in 2016. He acquired the group in 2000, but sold it to serial bankrupt Dominic Chappell for £1 just 13 months before it collapsed.

He later agreed to pay £363m to shore up its underfunded pension scheme after facing allegations that he had sold the company to avoid addressing the pension obligations.

Sir Philip sold BHS to Dominic Chappell, pictured, for just for £1 © Getty Images

Few believe he would have the appetite for another stint in a retail industry that has changed fundamentally since he started out.

“Obviously I don’t know for sure, but I get the feeling this is it,” said the former associate. “He feels terribly got at over the BHS failure and just wants out.”

Trying to regain control of brands such as Topshop would also be controversial given the impact that any administration would have on suppliers, landlords and Arcadia’s pension scheme, which has a substantial funding deficit.

Sir Philip, who is 68, now spends most of his time in Monaco and has rarely been seen in the UK since allegations — which he has denied — about his conduct towards employees became public.

Another senior retail figure who has worked with Sir Philip in the past believes the opinion of his wife Tina, also the ultimate owner of Arcadia, will shape his next move.

“She will be pushing him in one direction or another. She is very influential behind the scenes and very measured,” he said. “Whatever he does now he cannot win.”

Sir Philip declined to comment.

Selling points: key moments in Philip Green’s career

Philip Green and model Kate Moss watch a charity fashion show in 2007 © REUTERS

MAY 1990

Fashion chain Amber Day, of which Sir Philip is chief executive, buys discount store What Every Woman Wants for £47m

JANUARY 1992

Sir Philip is forced out of Amber Day after failing to meet profit forecasts. He would never run a listed company again

JANUARY 1999

The £550m takeover of retail group Sears marks Sir Philip’s arrival as a major retail player

DECEMBER 1999

Abandons bid for M&S after press coverage of wife Tina’s pre-bid share purchases

MARCH 2000

Acquires BHS for £200m saying he can turn the ailing business round

OCTOBER 2002

Takes over Arcadia for £850m and immediately sells the company to his wife, who lives in the tax haven of Monaco

JULY 2004

M&S board blocks his second attempt at a purchase, this time for £9.1bn

OCTOBER 2005

Tina Green receives tax-free £1.2bn dividend from Arcadia

APRIL 2009

Topshop opens first US store on New York’s Broadway

DECEMBER 2012

Leonard Green & Partners, a Los Angeles private equity firm, buys 25% stake in Topshop, valuing brand at £1.4bn

MARCH 2015

BHS sold for £1 to UK-based investment vehicle Retail Acquisitions, owned by former bankrupt Dominic Chappell

APRIL 2016

Eighty-eight-year-old retailer BHS goes bust, affecting 11,000 jobs across 164 stores

FEBRUARY 2017

Sir Philip agrees to pay £363m to make good BHS pension fund

APRIL 2019

Buys back Topshop stake for $1 from US investor Leonard Green, enabling the ‘Arcadia board to focus on the restructuring options currently being considered’

JUNE 2019

Arcadia CVA approved, cutting rents on stores

january 2020

Assault charges against Sir Philip in US dismissed

march 2020

UK Covid-19 lockdown shuts all Arcadia stores



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