Britain's sixth richest man is a ruthless deal-maker. But as he enters
politics, will his lifestyle and financial affairs survive scrutiny?
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Jonathan Evans Sir Philip Green: 'I want to make my money as
a retailer, not by putting people out of work. |
Sir Philip Green doesn't do politics.
He makes money in stratospheric quantities, gives liberally to
charities, hangs out with Naomi Campbell and Kate Moss on his mega yacht
and every Friday flies to Monaco aboard his private jet to spend the
weekend with his family. It is the uncomplicated routine of your
everyday self-made billionaire. As for the messy business of government
– it is a place he has repeatedly insisted he simply does not want to
go.
But that all changed earlier this month with the announcement that the
58-year-old tycoon had agreed to share what he has learnt over 40 years
of wheeler-dealing in the retail fashion trade to help to drive down
Whitehall costs. Not surprisingly for a man as colourful, brash and
successful as Sir Philip, it is an appointment that has not gone
unremarked or uncriticised.
It will be recalled that the Liberal Democrats, before signing up to the
coalition with their Tory partners, spent much of the election campaign
pledging to crack down on tax avoidance and lambasting the beneficiaries
of so-called casino capitalism
The tycoon may have form in both areas – not that he sees it that way.
As far as he is concerned he and his Arcadia group employ 45,000 people
while Green himself has paid £400m in tax over the past five years. Yet
critics will recall that in 2005,
Sir
Philip's wife Tina received a £1.2bn dividend as nominal
owner of Arcadia, which includes Topshop, Burton and Dorothy Perkins
among its high street names.
Because she happens to live in Monaco she also enjoyed a tax saving
estimated at up to £300m, which might have helped to build 10 new
secondary schools for the Treasury he now serves. The dividend is the
largest ever paid in corporate history. So it is hardly going to
convince those on the receiving end of any savings he makes in his role
as the Government's "efficiency tsar" that – as George Osborne and
David Cameron
like to insist – we are all in this together.
But that Sir Philip is very rich is hardly news. His gilded lifestyle
with a personal 200ft super yacht, the lavish parties – the three-day
toga bash for his 50th cost £5m while he hired Destiny's Child to sing
at his son's bar mitzvah – not to mention his glittering roster of
super-rich friends, make him a man somewhat at odds with these
straitened times. He is both the greatest and most visible winner from
an unprecedented boom era which spawned extraordinary levels of excess
and which gave way to the worst bust since the 1930s. According to
Robert Peston, the BBC's business editor who devotes an entire chapter
to Sir Philip in his book Who Runs Britain?, Green is quite simply "the
king of jackpot capitalism".
Britain's sixth richest man built his estimated £4bn personal fortune
from relatively humble origins. Born into a business-obsessed
middle-class family in Croydon (the East End patter is an affectation
acquired during his early years in the rag trade), Green was an
unspectacular scholar at the Jewish Eton, the former Carmel College in
Oxfordshire. His father, who rented out televisions, died from a heart
attack when Philip was 12. Green too suffered cardiac trouble just as he
prepared to hit the big time. His mother and her businesses, which
included a petrol station, were to become his greatest influences.
Leaving school with no qualifications at 15, he was apprenticed to a
wholesale shoe trader working from a warehouse on the edges of the City.
Though it was not a glamorous start, the youngster had entered an
industry that was dramatically changing to reflect equally rapid shifts
in society.
The 1970s were a time when youngsters wanted regular supplies of cheap
fashionable clothes and denim and discounts were king. Having been left
the equivalent of £180,000 by his father, he hoped to build on his
grass-roots knowledge, pioneering links with Far East producers. But
these early ventures, including the ill-fated Joan Collins Jeans range,
were not successful. By the time he was 30, a lifetime of restless
striving had brought little in the way of tangible rewards. In business,
however, failure can be the greatest teacher. In the first half of the
1980s, Green bought and turned around two ailing companies – Bonanza
Jeans and Jean Jeanie – through an instinctive process of relentless
work, getting the right stock, hiring the right staff and deploying an
uncanny ability of buying and selling at the right time. With his first
millions in the bank, a spell at Lee Cooper proved unsatisfactory while
his next move, to Amber Day, saw him fall permanently out of love with a
City of London which he felt looked down its public school and
university-educated nose at him.
Through the 1990s, amid an unprecedented consumer boom, he bought a
succession of underperforming companies – Owen Owen, Olympus, Mark One,
Shoe Express and finally, in 1999, the retail chain Sears UK with the
help of his friends, the Scottish entrepreneur turned billionaire
philanthropist
Tom Hunter
as well as Sir David and Sir
Frederick Barclay. Between 2000 and 2005 he made the two deals of his
life, acquiring the fading Bhs brand for £200m and Arcadia for £850m –
though his second ill-fated bid for Marks & Spencer collapsed amid
recriminations.
Peston points out that, though Green took risks with his own money, his
ability to persuade the banks to support these deals stands out. He paid
only £20m from his own coffers for Bhs but was able to award himself
£400m in dividends only four years later. His personal equity investment
in Arcadia was £9.2m, for which three years later he was able to reap a
130-fold return of £1.2bn. For his part Green insists he has always
under-promised and over-delivered to his backers.
Even those who dislike what they deem his bullying style admit he is a
turbo-charged genius as a clothes retailer. He is more than happy to
berate journalists who cross him (the Daily Mail hates him), but is also
accessible and prides himself on returning 99 per cent of phone calls.
Employees and suppliers might justifiably fear him but he has a loyal
cadre of long-serving lieutenants whom he listens to. He is equally
happy to impart his advice, and when he does, people tend to listen.
But the greatest deal of his life is now some five years past. Some
observers believe he is restless in his weekly routine living in a
Mayfair hotel before jetting home for the weekend. Holidays at Sandy
Lane, playing tennis with Roger Federer, gambling at the world's top
casinos and his role as a powerful behind-the-scenes figure in the
Premier League and at his beloved Tottenham Hotspur may have begun to
pall.
Perhaps an indication of what might now be driving Sir Philip to enter
the bear pit of politics and endure the disdainful snorts of Today
programme presenters can be found in the final chapter of Liz Barclay's
The Unauthorized Guide to Doing Business the Philip Green Way. Barclay,
a self-confessed fan of the retail magnate, lists 10 secrets behind
Green's enormous fortune, the last of which is "give something back".
Beneath the gruff exterior she notes a more vulnerable side and a need
for approval from his peers that he is the best.
Hence acts of spontaneous generosity such as the £60,000 he donated to
charity for a one-minute kiss with Kate Moss which he "gifted" to Jemima
Khan to enjoy, though detractors saw it as evidence merely of his genius
for self-promotion. He gives £1m a year to the charity Jewish Care,
donated his private jet to
Madeleine McCann's
family and gave
£100,000 in cash and £1m in clothes to help victims of the tsunami. He
has also spent £5m setting up the Fashion Retail Academy and £1.25m to
promote business teaching in schools.
Of course he can afford it. Yet politics always seemed an unlikely
calling and first contacts with David Cameron were unpromising. The Tory
leader criticised Bhs for selling padded bras to teenage girls even
though the product line had been withdrawn three years earlier.
Whatever his motivation, those who think he will have to walk away, as
fellow tycoon David Rowland did yesterday before starting his post as
Tory treasurer, are likely to be disappointed.
A life in brief
Born: 15 March 1952 in Croydon, south London.
Family: Lived in Hampstead Garden Suburb. His father died of a heart
attack when Green was 12, leaving him in line to inherit the family
business. He is married to South African Cristina, who lives in Monaco
with their two children Chloe and Brandon.
Education: Attended Jewish boarding school Carmel College in
Oxfordshire. Left school at 15.
Career: Working by 16, and by 23 had set up his first fashion business,
importing jeans from the Far East. Now owner of retailers Bhs and the
Arcadia Group, Green has achieved billionaire status.
He says: "I could have closed down bits of British Home Stores to make
more money but it's not my style. I want to make my money as a retailer,
not by putting people out of work."
They say: "You know where you stand with him. He tells you the way it
is, not the way you want it to be. The difference about Philip is that
he plays with his own money, not a plc's money. He puts his balls on the
table every time and that's what you've got to admire about him". -
Marco Pierre White |