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Philip Green’s style of doing business ‘worked better years ago’
Retail analyst explains where he thinks the fashion boss went wrong – as well as what he did right
December 2, 2020 11:40
Retail analyst explains where he thinks the fashion boss went wrong – as well as what he did right
December 2, 2020 11:40Sir Philip Green’s “style of doing business worked much better years ago,” said retail industry analyst Richard Hyman as the Topshop tycoon’s fashion empire collapsed into administration.
Arcadia, which owns high street brands Topshop, Burton, Miss Selfridge and Dororthy Perkins, appointed joint administrators from Deloitte on Monday.
The retail industry is a “chronically oversupplied market” and is changing at an unprecedented pace, Mr Hyman said.
“Given the change that’s happening, it really requires you to be able to analyse accurately what those changes are, what the implications are and to align your business accordingly.
“That’s never been his strong suit. It’s never been his strong suit to take any advice from anyone either.”
He praised Sir Philip’s aptitude for striking deals and trading but said he had many weaknesses.
“He saw getting the most out of the assets that he acquired as stripping every element of cost that he could out of the business and taking cash out now.
“What he didn’t appreciate is that sometimes you have to leave some cash in to invest in tomorrow’s cash generation, not merely focus on today’s,” he said.
Earlier, Arcadia boss Ian Grabiner said that the “forced closure of our stores for prolonged periods, has severely impacted on trading across all of our brands.”
“Throughout this immensely challenging time our priority has been to protect jobs and preserve the financial stability of the group in the hope that we could ride out the pandemic and come out fighting on the other side.
“Ultimately, however, in the face of the most difficult trading conditions we have ever experienced, the obstacles we encountered were far too severe,” he said.
The group employs 13,000 people, with some 9,294 members of staff on furlough. No redundancies have been announced and stores will continue to trade.
Joint administrator Matt Smith said lockdowns and “broader challenges facing bricks and mortar retailers” had caused a “critical funding requirement” and the administration.
Arcadia was acquired by Sir Philip in 2002 for £850 million.
The company traces its history back to the Burton Group, a menswear brand launched in 1903 by Lithuanian émigré Meshe David Osinsky, who later changed his name to Montague Burton.
Sir Montague, who launched the business at 18 with £100 he had borrowed, was knighted in 1931 for services to industrial relations and died in 1952.
Sir Philip was approached for comment through Arcadia but had not replied by the time of publication.
