Workers at Topshop, Burton, Dorothy Perkins, Evans, Miss Selfridge and other retail brands in the Arcadia empire of Sir Philip Green might want to read this book as they contemplate redundancy.
Green is haggling with The Pensions Regulator over the extent of his liability for the black hole in the Arcadia pensions fund as he seeks a Company Voluntary Arrangement (CVA) — a kind of get-out-of-jail-free card for serial business “entrepreneurs”. The hole dwarfs the £571-million deficit at BHS when the store chain collapsed in 2016 after Green tried to flog it for £1 to a serial bankrupt.
In the case of BHS, only a lengthy public shaming of this one time “king of the high street” forced him to stump up £363 million.
Then in October 2018 Green was exposed as the businessman who had gagged The Daily Telegraph over #MeToo allegations of sexual harassment, bullying and racist abuse, having used non-disclosure agreements to silence his accusers.
This is a man knighted by Tony Blair for “services to retail” in 2006 and appointed a special advisor to David Cameron in 2010, laughably, to review public sector efficiency.
Damaged Goods by Oliver Shah charts Green’s rise in the context of “the long post-war consumption boom that powered the expansion of property heavy high-street chains” and a “media and political class quick to venerate celebrity and wealth while turning a blind eye to bullying”.
Green’s family were Jewish immigrants to London — the antisemitism he encountered in business partly shaped him — and Green attended a prestigious private school, leaving with no qualifications.
He cut his teeth borrowing — initially from his mother who was a buy-to-let landlord in Croydon — to buy bankrupt company stock and resell it, cultivating contacts who operated around the edges of the law and a reputation for making those who worked for him “feel small.”
His deal-making coincided with the deregulation of the City and the explosion in investment banking and private equity which followed, fuelling property inflation and retail mergers and acquisitions.
Green surfed the wave, securing eye-watering loans from Bank of Scotland, Barclays, Goldman Sachs and German bank WestLB against the future income of companies he targeted for acquisition while outsourcing the clothes-making to Hong Kong and China.
When Green acquired the Sears retail empire in a “back-of-a-fag-packet deal” with borrowed cash in 1999 he recouped the entire £548 million price by breaking up and selling the business and retained £280 million that he stashed in the tax haven of Monaco where his wife Tina had relocated.
He bought BHS for £200 million in 2001 and extracted an estimated £1.2 billion from the business. Shah estimates Green made £420 million from the purchase alone. In 2002, he bought Arcadia for £850 million, loading the company with debt and subsequently paying Tina a £1.2-billion tax-free dividend.
Green tried and failed twice to buy M&S as his wealth soared: £1.9 billion in 2003, £3.6 billion in 2004, £4.9 billion in 2005.
Shah, now the business editor of the Sunday Times, acknowledges the part played by the newspaper in fuelling Green’s status as a celebrity “entrepreneur”. Successive Sunday Times business editors would spend hours each Saturday on the phone to Green, using his gossip for “exclusive stories”.
All the while, Green’s “reputation as a master retailer was a mirage” writes Shah. Or as the one-time brand director of Topshop, Jane Shepherdson, put it: “His view was: ‘If I screw the supplier enough, I can get the price up enough and I can rip off the customer’.”
This book goes a long way to explain “the crisis on the high street”.