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HHe was once seen as the king of the UK’s high street, but the likely demise of Sir Philip Green’s fashion empire comes long after the crown collapsed.
Green’s image was irreparably tarnished when he sold his ailing department store chain BHS for £ 1 to Dominic Chappell, a former bankrupt with no retail experience.
The business collapsed just a year later with the loss of 11,000 jobs and a pension deficit of 571 million pounds, sparking a protest that eventually forced Green to pay 353 million pounds to support the pension scheme.
A parliamentary inquiry into the matter concluded that the Green family had systematically looted BHS and described the hole in the pension fund as “the unacceptable face of capitalism.”
It led to calls for Green to be stripped of his knighthood, awarded by Tony Blair for his services to the retail industry in 2006.
As he was reeling from that financial blow, Green’s reputation came under further attack by allegations of harassment and intimidation. Former Labor cabinet minister Peter Hain used parliamentary privilege in 2018 to name the Topshop mogul as the businessman at the center of allegations of mistreatment of Arcadia staff.
Green has always denied any illegal behavior.
Amid wide press coverage of the allegations, Green headed abroad, first to the United States and then to Monaco. Meanwhile, his Arcadia Group, long used to close surveillance by the retail boss, was dwindling.
Its huge portfolio of high street stores has long seemed outdated and Green has been closing dozens of outlets a year for some time. But former employees and industry watchers say the veteran entrepreneur did not invest enough in the move to the internet and was left with outdated ways to buy and sell products.
With stiff competition from online newcomers like Asos and Boohoo, who get their fashions closer to home and can respond much more quickly to the wishes of their young shoppers, Topshop and weaker Arcadia brands have struggled.
Its attractions were also undermined by companies like Primark, which has combined cheap prices with savvy digital marketing techniques and lured shoppers to its ever-larger, service-packed stores.
Arcadia’s share of the apparel market has plummeted to 2.7% from nearly 5% in 2015, according to analysts at GlobalData.
Sofie Willmott of GlobalData said: “The Arcadia group of brands has lost relevance in recent years, with more attractive and innovative retailers better targeting their buyers, such as Asos and Boohoo Group, making their way.”
Richard Hyman, the veteran retail analyst who has followed Arcadia’s progress for decades, estimates that Topshop’s sales have likely fallen to just 600 million pounds from more than 900 million three years ago.
He says the group’s disappearance cannot be attributed to Green. Most of the smaller brands, like Evans and Wallis, were past their peak when Green acquired them in 2002 and possibly his biggest mistake was keeping them past their expiration date.
“It’s amazing that I’ve kept them going for so long and that I continue to profit from them and that they keep so many people employed,” Hyman said.
Failure to refine the group meant that strong brands, including Topshop, lost investment as they tried to shore up troubled divisions such as BHS, Wallis and Evans.
Hyman adds: “Green has made life more difficult for himself than it could have been, as his reputation has preceded him and made it much more difficult to attract the kind of talent he wanted and needed.”
Insiders and competitors say it also deprived brands of the kind of investment and strong relationships with the best suppliers that could have helped them fight the competition.
“There was a lack of investment in the right places,” says a former staff member. “Four or five people who have been there for decades run the place. They were still buying in depth from the Far East with long lead times. “
In 2009, a poorly developed company was started in the United States and consumed resources before it was liquidated last year.
Another brake on investment was payments to Green’s family. The Greens have raised over £ 1.5 billion from Taveta, Arcadia’s parent group, since 2005, including a £ 1.2 billion dividend, paid to Green’s wife, Tina, in the tax haven of Monaco, and to the minus £ 356 million in interest, rent and property.
The largest payment was made at the height of Green’s reign on Main Street. He financed a lavish lifestyle that included various yachts and extravagant birthday parties attended by Hollywood A-listers.
It had already been a bumpy ride to get there.
After dropping out of school at age 16, Green worked in the family real estate business and later a shoe importer before turning to fashion buying and selling.
Their ventures had mixed success. In 1981 he launched a range of Joan Collins jeans that failed and in 1988 he took over the menswear company Amber Day. At first, the business prospered, but in 1992, after losing profit forecasts, he was expelled and vowed never to participate in a publicly traded business again.
Despite the scandal, Green was back in the limelight with a series of lucrative deals that included the breakup of the UK’s Sears empire, part of which was sold to Arcadia.
Backed by top street vendor, now restaurateur, Richard Caring, he bought BHS for £ 200 million in 2000 and claimed to have revived the business before securing Arcadia in 2002 for £ 850 million.
But when BHS began to falter, Green turned down numerous offers to buy in hopes of a better deal. The group was eventually sold to Chappell in 2015, ushering in the recession in Green’s fortunes.
