Is the party over for Sir Philip Green?
He turns 67 today. But as he faces allegations of sexism and questions over future of his fashion empire . . .
Ostentatious parties have always loomed large in sir Philip Green’s life. From hobnobbing with Bill Clinton and elizabeth Hurley at a fancy dress ball in st Petersburg, to hosting his own bashes legendary for their excess, the tycoon has rarely shunned the limelight.
His 60th was a £6m extravaganza in Mexico thrown for him by wife tina that lasted for four days.
Guests including naomi Campbell and Leonardo DiCaprio were entertained by stevie Wonder and the Beach Boys.
His 65th two years ago was a relatively muted affair – by his standards at least – for family and friends in the Dorchester Hotel, where he lives when he is in London. the gathering was overshadowed by the row over his sale of BHs to a serial bankrupt with a multi-million shortfall in its pension fund.
His birthday celebrations today have a similarly sombre tinge as once again the revelry is eclipsed by scandal. Green has been engulfed by a tsunami of accusations over sexist, racist and bullying behaviour towards former staff.
His arcadia empire, which includes topshop, is suffering from the same pressures as the rest of the High street: online competition, hefty business rates and changing fashion tastes.
senior industry insiders speculate he is looking for a buyer for all, or part, of arcadia, which also owns brands including Wallis and Dorothy Perkins.
there is also speculation he may be considering a Company Voluntary arrangement (CVa), an agreement with creditors allowing a business to carry on trading while reducing or shedding its debts.
‘everyone is experiencing a tough trading environment but arcadia has been suffering more because it is weak,’ says retail analyst Richard Hyman.
‘the brands are all very mature businesses that, aside from topshop, peaked many years ago and are all in long-term decline. until relatively recently topshop was the jewel in the crown, but now it is rather less shiny and bright.’
HYMAN adds: ‘ Green’s room for manoeuvre is very limited. i think he’d love to get out but the whole BHs saga makes it very difficult.’
Be that as it may, at just three years off turning 70, and having suffered a series of heart attacks, he has what are known in the business world as ‘ succession issues’. His children Brandon and Chloe do not seem natural heirs to the mantle. stepson Brett Palos, a property investor, is the most businessminded of the younger generation but has commercial interests of his own.
the obvious answer is to find a buyer. Possible purchasers including sports Direct owner Mike ashley or edinburgh Woollen Mill’s Philip Day.
But memories have not faded of the BHs fiasco when Green sold in 2015 to Dominic Chappell, who had been declared bankrupt three times. the chain went under with a huge pension fund black hole just a year later.
the arcadia pension fund is in deficit to the tune of £300m. Green has put a plan in place for the company to pay in £50m a year to make good the shortfall, but it remains a millstone for him and any potential purchaser.
offloading the fund to a specialist buyer is an option, though likely to be a prohibitively expensive one.
another possibility is for an outside investor to take a holding. us private equity house Leonard Green (no relation) bought a 25pc stake in topshop in late 2012, for £350m, but trading has since deteriorated.
Green gained control of topshop when he bought arcadia for £850m in 2002. at one point he transformed it into one of the most popular fashion destinations for young people, particularly through a collaboration with model Kate Moss, whose creations flew off the hangers.
in 2005, after just three years, the business paid out a near £1.3bn dividend to tina, a resident of tax haven Monaco.
Dividends on that scale – or any scale at all – are a mere memory. none were paid in 2016 or 2017.
the most recent figures, for the year ending august 2017, show profits and sales have fallen at taveta investments, which is the ultimate holding company for the store. taveta’s operating profit fell to £124m from £215m, while topshop and topman ran up a loss of nearly £10.9m, down from a profit of £59m the previous year.
THE next set of numbers is not expected until May, but experts say the situation will almost certainly have got worse.
the #Metoo scandal has led to the loss of several female aides, foremost among them Baroness Brady, who stepped down as chairman of taveta. another female non- executive, sharon Brown, left at the same time and sir Philip’s in- house solicitor, Deborah Cooper, has quit.
Green, who was unavailable for comment, has also parted company with his PR guru neil Bennett, the chief executive of City firm Maitland.
as he enters his 68th year, he is facing one of the most difficult chapters in a long career that has transfixed and appalled the City ever since he burst onto the London scene in the swinging sixties.