Is shamed Green’s empire crumbling?
Billionaire’s insolvency move as jobs and stores face the axe
SIR Philip Green is preparing a major overhaul of his High Street empire that is expected to spark a wave of store closures and huge job losses.
The billionaire retailer, who turned 67 yesterday, is plotting an insolvency process across the Arcadia Group in the latest sign that his retail empire is beginning to crumble.
Arcadia, which traces its roots back to 1903, owns fashion chains Topshop, Topman, Miss Selfridge, Burton, Evans, Dorothy Perkins and Wallis. The group has 570 stores and hundreds of concessions and employs around 22,000 staff. The brands – once hugely popular with teenagers and 20-somethings – are now struggling to hold their own against an onslaught from online- only firms such as Asos and Boohoo.
Sir Philip is now understood to be working on proposals for a controversial restructuring process called a Company Voluntary Arrangement, according to Sky News.
The procedure, which has been used by failed retailers such as Maplin and Toys R Us, is likely to see swathes of shops shut, resulting in substantial job losses. It was used by the retail mogul to fend off the collapse of failed department store BHS. The move – which is expected to begin within weeks – is the latest blow for Sir Philip who has come under fire amid allegations of sexism, racism and bullying towards staff.
The scandal is thought to have led to the resignation of one of Sir Philip’s closest business associates Baroness Karren Brady – star of TV’s The Apprentice – from Arcadia’s parent company Taveta. Sir Phililp was awarded a knighthood for services to the retail industry in 2006, but his reputation has become tarnished in recent years.
Calls for him to be stripped of his knighthood came after he sold off struggling department store BHS to serial bankrupt Dominic Chappell for just £1 in 2015. Little over a year later, BHS crashed into administration, leading to the loss of 11,000 jobs and leaving a massive black hole in the company’s pension scheme. Sir Philip’s latest retail troubles have sparked concerns over the future of Arcadia’s pension scheme. According to documents published by MPs in 2017, the fund’s deficit has swelled to £565million.
Following pressure from MPs, in April 2017, Sir Philip agreed to double contributions and plug the scheme with £50million a year over the course of a decade. A spokesman for The Pensions Regulator confirmed it is in talks with trustees of the Arcadia pension scheme.
Most recent figures for Taveta, for the year ending August 2017, show profits almost halved from £215million to £124million. The accounts show Topshop and Topman ran up a loss of nearly £10.9million – down from a profit of £59million the previous year.
Arcadia’s struggles come amid a slump on the High Street that has claimed thousands of jobs over the past year and seen a vast number of store closures.
Traditional retailers have been battling with a toxic cocktail of rising costs such as crippling business rates and fierce competition from internet businesses.
Sir Philip, whose personal fortune is estimated at £2billion, was unavailable for comment last night.