LONDON (Reuters) – The “King of the High Street” has lost his kingdom. The collapse of British businessman Philip Green’s Arcadia fashion empire in administration on Monday is expected to bring an inglorious end to a remarkable and controversial career.
With around 13,000 jobs at risk and an estimated 350 million pounds ($ 467 million) hole in the company’s pension fund, the mogul could ultimately be stuck with another less regal moniker: “The Unacceptable Face of Capitalism.” “
For two decades, the 68-year-old dominated the UK retail scene and apparently couldn’t hurt, building himself a multibillion-pound fortune through a series of acquisitions.
He has been knighted by the Queen, celebrated by Prime Ministers Tony Blair and David Cameron, and rubbed shoulders with stars like model Kate Moss and actor Sylvester Stallone.
Based in Monaco, home of the super-rich, he has often been photographed by paparazzi on his £ 100million superyacht Lionheart and even hired Beyonce to perform at his son’s bar mitzvah bash.
Green was climbing high.
He had bought the department store chain BHS for 200 million pounds in 2000, then Arcadia for 850 million pounds two years later and had tried twice, without success, to buy Marks & Spencer.
Its flagship brand, Topshop, was the destination of choice for teens and affordable fashion enthusiasts. In 2009, he took the brand to the United States, opening a department store in New York.
When he sold a 25% stake in Topshop to US private equity firm Leonard Green & Partners in 2012, that brand alone was valued at £ 2 billion, further bolstering its oft-cited nickname of ‘King of the main street ”.
THE EMPEROR’S CLOTHES MOVE
What followed was a series of business missteps that saw his empire crumble and also undermined the personal reputation of a businessman whose intelligent public image of the streets belied a more distinguished start. in life.
Green went to the exclusive Carmel College boarding school in the south of England, but left at 16 without any formal qualifications and, supported by a loan from his family, threw himself into the uproar of the rag trade. from London.
A traditional retailer, it failed to adapt its fast fashion brands when competitors emerged.
They were disappointed with new players like Zara, H&M and Primark from Inditex, while their inability to successfully grow online businesses was defeated by e-commerce specialists like ASOS and Boohoo.
Midas had lost contact. Topshop was no longer cool.
The hammer blow to Green’s reputation came in 2015 when he sold BHS to a group of little-known investors, including former bankrupt Dominic Chappell, for a nominal sum of one pound.
A year later, BHS went out of business, with 11,000 jobs lost and a £ 571 million hole in its pension fund.
Until then, politicians, the public and the press had often admired Green, even with his extravagant lifestyle.
In 2005, when Arcadia paid the wife of Green Tina, the group’s ultimate owner, a dividend of £ 1.2 billion – one of the largest in British business history – some people decried the payment. while others saw it as the fruit of his success.
BRITTANY TURNS ON ITS TYCOON
After the collapse of BHS, however, all bets were off.
Lawmakers called him the “unacceptable face of capitalism,” saying his greed and disregard for corporate governance led to the company’s demise.
They demanded that he be stripped of his knight’s title, while the newspapers vilified and criticized him as a big cat tycoon.
After the pension regulator sued him, Green wrote a check for £ 363million in 2017 to help fill the hole in the BHS pension fund.
But his reputation was irreparably damaged, and further tarnished when he was appointed to the UK parliament for bringing a lawsuit to try to prevent the publication of allegations of sexual harassment by him against Arcadia staff. He denies the allegations.
All the while, the business has continued to deteriorate at Arcadia, which owns the Topshop, Topman, Dorothy Perkins, Wallis, Miss Selfridge, Evans, Burton and Outfit brands, and has more than 500 stores.
A restructuring last year provided only a temporary respite. COVID-19 lockdowns have proven the last straw.
The group’s collapse is a blow to Green, who has long prided himself on his financial acumen.
In an interview with Reuters in 2012, he pulled out a wad of fifty-pound bills from his pants pocket.
“I prefer to talk about things that I understand,” he says. “It’s money.”
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