Philip Green fashion empire hit by 16% fall in profits
June 5, 20171.5K views0 comments
Sir Philip Green’s fashion empire suffered a 16% fall in profits last year as the billionaire’s Topshop to Miss Selfridge group struggled with difficult trading on the high street.
The drop in profits caps a torrid 12 months for the Monaco-based businessman, who was hauled before MPs following the collapse of BHS, which he sold to a group led by a former bankrupt for £1.
Accounts for Green’s holding company, Taveta Investments, show profits in the year to the end of August 2016 fell to £211m as sales dropped 2.5% to just over £2bn, according to a source. The accounts are not yet available at Companies House.
Taveta, which owns the Green family’s Arcadia Group of companies including Topshop, Topman and Burton, filed its accounts on 31 May – the last day before incurring a late filing fee. A spokesman for Green declined to comment and said Green would not comment either.
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Despite the decrease in profits, Taveta ended the year with cash reserves of £223m, which was said to be roughly the same as last year. The company did not pay a dividend.
Green is said to have appointed management consultants at McKinsey to try and help him turn around Arcadia’s fortunes and help the company catch up with rivals in online shopping. His spokesman declined comment about Green’s use of consultants. McKinsey refused to comment.
Arcadia has lost several of its top bosses recently, including TopShop managing director Mary Homer who left on Friday to run homeware group The White Company. Other executives who have left recently include Evans boss Fiona Ross, Burton’s managing director Wesley Taylor and Miss Selfridge creative director Yasmin Yusuf.
The pension scheme deficit at Arcadia Group has risen to nearly £1bn, according to documents recently published by MPs investigating the demise of BHS and pensions regulation. Arcadia, which has two pension schemes – one for senior executives, another for the rest of the staff – had a combined deficit of £993m in March last year on a buyout basis. That valuation is based on the likely cost of winding up the scheme and securing benefits with an insurer.
Arcadia has agreed to pay a combined £50m into the schemes each year, with the aim of eliminating the deficits over the next 10 years. That will increase to £54.5m a year from 2019. The deal was struck soon after Green agreed to pay £363m to resolve the pension deficit at BHS, which collapsed with the loss of 11,000 jobs in spring 2016.
Last year MPs demanded that Green, who was described in parliament as a “billionaire spiv”, be stripped of the knighthood he was awarded in 2006. In a fiery Commons debate Iain Wright, Labour chair of the business select committee, said: “Sir Philip received his knighthood for services to retail. However, throughout the course of our inquiry, it became increasingly evident that he wasn’t particularly good at retail at all.”
However, the parliamentary vote holds no legal power, and the decision on whether to strip the billionaire of his title will ultimately be made by the honours forfeiture committee. The veteran Labour MP Frank Field said Green had not done enough to keep his title as concerns lingered about the £363m settlement struck between the retail tycoon and the Pensions Regulator.
“Sir Philip Green remains on the hook,” he said recently. “When parliament comes back from the election we need to pursue the charge sheet from the Pensions Regulator against him and what the Pensions Regulator got in return.
“Once we have done that, we will realise how inadequate his settlement was. He has not done enough to hold on to his knighthood.”
Green and his wife, Tina, are the fifth-richest couple in the UK, according to the Sunday Times Rich List even though their combined fortune dropped by £433m to £2.8bn in the annual wealth ranking.
The often foulmouthed billionaire celebrated his 65th birthday with a lavish party at the Dorchester hotel with friends including Kate Moss, the Strictly Come Dancing host Tess Daly and Sports Direct’s founder, Mike Ashley.
In previous years, arrangements by his wife Tina included a toga party in Cyprus with entertainment from Rod Stewart and private concerts starring Robbie Williams and Stevie Wonder. This year, the big name entertainer was the magician Dynamo (Steven Frayne).