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Sir Philip Green: From ‘King of the High Street’ to ‘Unacceptable Face of Capitalism’ – BBC News

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Image caption Sir Philip Green: still ‘King of the High Street’?

Just four years ago Sir Philip Green was dubbed King of the High Street by BBC Radio 4’s Profile programme.

Now he is being branded the “Unacceptable Face of Capitalism” by a Conservative MP, as BHS, the retail chain he sold just a year ago for 1, goes into administration leaving a 571m hole in its pension fund.

Richard Fuller MP, a member of parliament’s Business, Innovation and Skills Committee, says the retail tycoon’s reputation should be questioned.

It is a reputation rich in character and anecdote from his failed attempts to takeover Marks and Spencer to the lavish lifestyle that has attracted accusations of tax avoidance.

Will to win

Despite being born into a well-to-do family in South London, Philip Green prided himself on having worked his way to the top.

His competitive streak was apparent from an early age, noticed by school mates at Carmel College, his exclusive boarding school, nicknamed the “Jewish Eton”.

School friend Tony Rauch recalls Philip making a beeline for the table tennis table at break time, tussling with another boy to get hold of the bat that was in best condition.

“Unfortunately the other kid was a bit bigger than Philip and won,” he told BBC Radio 4’s Profile programme in 2012.

“He got very angry; cried a little bit,” says Mr Rauch. “He wasn’t physically hurt, I think he was just very angry at having lost.”

Sir Philip never lost his will to win. Profile reported that even when playing a game with his own children he played to win and quoted him as saying: “Why do you want to do something and not win – to not succeed at something?”

He left school aged 15, and began working on the forecourt of the petrol station his mother managed.

Early ventures

He then went on to learn business basics as an apprentice in a shoe warehouse and at 23-years-old he set up his own business importing and selling jeans.

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Image caption Staff leave the BHS headquarters after being told the company will go into administration

Stuart Lansley, the author of an unauthorised biography of Sir Philip described those early days for Radio 4.

“He had a very mixed track record of starting up companies, and closing them down, working with other people, falling out with people.

“He travelled a lot, learning a lot about the supply chain, who the cheaper suppliers were and so on – but he certainly wasn’t a household name. “

Ironically it was BHS, known then as British Home Stores, that marked the moment Sir Philip Green finally “arrived” in 2000.

He paid 200m for what was already a slightly faded, dowdy chain. According to Stuart Lansley, his restless mind had spotted a beguiling new way to make money from the High Street:

“Philip Green moved from having a few million, to a few billion, in the space of a few years.

“He learned the way to make big bucks was essentially to do what’s known in the trade as a ‘leveraged buy-out’.

“He borrowed very large sums of money, invested a little bit himself, and bought up companies that were relatively cheap, because they weren’t doing very well. He turned them around, paying-off his debt, and then tripling – quadrupling – the money he put in, in a matter of a couple of years.”

Two years later he copied that model of the leveraged buyout when he bought the giant retail empire Arcadia, which owns brands such as Burton, Dorothy Perkins, Miss Selfridge, and of course Topshop and Topman.

Marks and Spencer bid

Sir Philip Green’s most ambitious move came in 2004, when he put together 10bn ($16.1bn), much of it from investment banks, to make an offer for Marks and Spencer.

Even Sir Stuart Rose – then his rival and at the helm of Marks at the time – was impressed.

“Philip is not only a first-class retailer, he is absolutely pre-eminent in his generation in terms of his financial nous and ability,” Sir Stuart told Profile.

“If I wanted to be slightly uncharitable, I could say that he came to the market to raise a very, very large sum of money at a time when money was cheap and freely available – but only Philip could have put that together. It was a pretty amazing achievement.”

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Image caption As chairman of Marks and Spencer, Sir Stuart Rose (L) faced two takeover bids from Sir Philip Green (R)

Famous temper

Sir Philip’s business skills may not be in doubt – but his interpersonal skills are another matter, and he reportedly has a very short fuse.

Sir Stuart Rose has first-hand experience of this, with Sir Philip reportedly grabbing the then Marks and Spencer boss by the lapels during his second unsuccessful takeover bid in 2004.

“There was a fairly physical occasion one morning, yes. I think tension had got quite high during the bid and Philip got upset about something,” said Sir Stuart.

“He wasn’t above ringing me up during the height of the bid and singing ‘if I were a rich man’ down the telephone to me, trying to point out the error of my ways [for not selling]… that I would make more money.

“He used to say ‘the only jet you know is Easyjet’.”

Lavish lifestyle

Sir Philip Green is not shy about enjoying the trappings of his success – his personal fortune is estimated at somewhere between 3bn and 4bn and he enjoys spending it.

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Image caption The high life: Sir Philip Green with Beyonc (L) and model, Cara Delevingne

He commutes into London from Monaco in a private jet, has a super-yacht called Lionheart, and is famous for throwing extravagant parties for friends and family in exotic places, with entertainment from the likes of Beyonce, Jennifer Lopez, and George Michael.

He has also forged a business partnership with supermodel Kate Moss, whose line of clothes helped raise Topshop’s profile in the world of high fashion.

But what has attracted the most controversy is not the lavish lifestyle – but his tax affairs.

In 2005 his company paid a 1.2bn dividend to the owner of Arcadia – Sir Philip’s wife, Tina. Since she is a resident of Monaco, she paid no tax in the UK.

In 2010 activists demonstrated outside the flagship Topshop and BHS stores in central London after Sir Philip was chosen by Prime Minister David Cameron to conduct a government efficiency review.

They thought his tax arrangements made him the wrong choice. Despite their anger, however, Arcadia has paid significant sums in corporation tax.

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Image caption Activists targeted BHS, Topshop and Topman in 2010

But some of Arcadia’s glamour has waned in recent years. Critics say that Green, notoriously averse to electronic gadgets, has not embraced online shopping as aggressively as his competitors.

While sales remained steady through the group, BHS was seen as the weakest link, and was sold for 1 to Retail Acquisitions, a group of investors including a Formula 3000 racing driver, bankers and entrepreneurs.

Now questions are being asked over just how much money Sir Philip had taken out of the company in the years before that sale.

Angela Eagle, the shadow business secretary, said: “In this situation it appears this owner extracted hundreds of millions of pounds from the business and walked away to his favourite tax haven, leaving the Pension Protection Scheme to pick up the bill.”

Business Editor Simon Jack said: “In his defence he ran this company for 15 years, he employed thousands and thousands of people, and he was a great force for UK fashion retail, and made it a great force here and in the US.

“It doesn’t look good as he jumps on his yacht to go back to Monaco leaving pensioners and employees worried about it, but he is not a natural corporate raider. He’s not necessarily the vulture type of capitalist that people have portrayed him in the last couple of days.”

This edition of Profile was first broadcast on BBC Radio 4 on Saturday, 8 December 2012. Listen again via the Radio 4 website or the Profile podcast.

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