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The rise and fall of Philip Green’s Arcadia retail empire



The expected collapse of Arcadia into administration on Monday brings down the curtain on three decades during which owner Philip Green attracted both admiration and opprobrium for his combative approach to business.

The group, whose brands include Topshop, Burton and Wallis, said on Friday it was “working on a number of contingency options” after the coronavirus pandemic hit its already struggling business hard.

Sir Philip’s career, which started with his selling surplus stock from a store called Bond Street Bandit, will be remembered chiefly for its dealmaking, often audacious and ruthless in equal measure. He made big decisions quickly and often persuaded backers — ranging from the secretive Barclay twins to leading high street banks — to lend huge amounts of money at short notice.

In his early days, his bold moves were rewarded with rapid and often spectacular returns. The break-up of Sears, which he took over in 1999, resulted in a profit of almost £300m, while the refinancing of Arcadia in 2005 resulted in a £1.2bn tax-free dividend to the Green family.

Sir Philip’s retailing ability is more hotly debated. “This idea that he had a Midas touch is nonsense,” said one person who has worked with him. “He is not strategic at all, there is no long-term plan.”

This person added: “He’s a rag trader. He buys things cheap and sells them more expensively. He’s very good at it and it made him very successful.”

Another person who has locked horns with the tycoon several times over the years said he appeared to “sit back and milk the cow” after his second attempt to acquire Marks and Spencer, in 2004, was unsuccessful.

File photo of Philip Green in a What Everyone Wants shop in Glasgow © FINANCIAL TIMES

Retail commentators say there was little in the way of investment in Arcadia’s main brands of Topshop, Burton and Wallis, whose market share has declined precipitously since their heyday in the early 2000s.

Sir Philip was put off ecommerce by the heavy investment required, allowing rivals such as Asos and Boohoo to grab market share among younger consumers.

Meanwhile on the high street, Arcadia’s brands were undercut on price by the likes of Primark and faced an onslaught of competition as H&M and Zara expanded in the UK. His own attempts to open stores overseas had mixed results.

As Arcadia’s decline gathered pace, senior executives and potential new hires became less willing to indulge his abrasive personality.

Arcadia has been eclipsed by rivals such as Primark

Sir Philip’s attitude towards bankers, suppliers, staff, analysts and journalists “definitely had an effect” on recruitment. the former associate said, adding that he was increasingly reliant on longtime lieutenants such as Ian Grabiner, Arcadia’s chief executive since 2009.

“[Those people] might be prepared to put up with the shit but that doesn’t mean they’re the best people to run those brands,” the person said.

Sir Philip’s reputation was also dented by the months of bitter recriminations that followed the collapse of BHS in 2016. He acquired the group in 2000, but sold it to serial bankrupt Dominic Chappell for £1 just 13 months before it collapsed.

He later agreed to pay £363m to shore up its underfunded pension scheme after facing allegations that he had sold the company to avoid addressing the pension obligations.

Sir Philip sold BHS to Dominic Chappell, pictured, for just for £1 © Getty Images

Few believe he would have the appetite for another stint in a retail industry that has changed fundamentally since he started out.

“Obviously I don’t know for sure, but I get the feeling this is it,” said the former associate. “He feels terribly got at over the BHS failure and just wants out.”

Trying to regain control of brands such as Topshop would also be controversial given the impact that any administration would have on suppliers, landlords and Arcadia’s pension scheme, which has a substantial funding deficit.

Sir Philip, who is 68, now spends most of his time in Monaco and has rarely been seen in the UK since allegations — which he has denied — about his conduct towards employees became public.

Another senior retail figure who has worked with Sir Philip in the past believes the opinion of his wife Tina, also the ultimate owner of Arcadia, will shape his next move.

“She will be pushing him in one direction or another. She is very influential behind the scenes and very measured,” he said. “Whatever he does now he cannot win.”

Sir Philip declined to comment.

Selling points: key moments in Philip Green’s career

Philip Green and model Kate Moss watch a charity fashion show in 2007 © REUTERS

MAY 1990

Fashion chain Amber Day, of which Sir Philip is chief executive, buys discount store What Every Woman Wants for £47m


Sir Philip is forced out of Amber Day after failing to meet profit forecasts. He would never run a listed company again


The £550m takeover of retail group Sears marks Sir Philip’s arrival as a major retail player


Abandons bid for M&S after press coverage of wife Tina’s pre-bid share purchases

MARCH 2000

Acquires BHS for £200m saying he can turn the ailing business round


Takes over Arcadia for £850m and immediately sells the company to his wife, who lives in the tax haven of Monaco

JULY 2004

M&S board blocks his second attempt at a purchase, this time for £9.1bn


Tina Green receives tax-free £1.2bn dividend from Arcadia

APRIL 2009

Topshop opens first US store on New York’s Broadway


Leonard Green & Partners, a Los Angeles private equity firm, buys 25% stake in Topshop, valuing brand at £1.4bn

MARCH 2015

BHS sold for £1 to UK-based investment vehicle Retail Acquisitions, owned by former bankrupt Dominic Chappell

APRIL 2016

Eighty-eight-year-old retailer BHS goes bust, affecting 11,000 jobs across 164 stores


Sir Philip agrees to pay £363m to make good BHS pension fund

APRIL 2019

Buys back Topshop stake for $1 from US investor Leonard Green, enabling the ‘Arcadia board to focus on the restructuring options currently being considered’

JUNE 2019

Arcadia CVA approved, cutting rents on stores

january 2020

Assault charges against Sir Philip in US dismissed

march 2020

UK Covid-19 lockdown shuts all Arcadia stores

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Iranian TV action thriller delivers warning to Zarif




It is hardly surprising that Mohammad Javad Zarif, Iran’s foreign minister and nuclear negotiator, is not a fan of Gando, a popular television drama that depicts an incompetent minister who scuppers nuclear talks with world powers by hiring dual nationals who turn out to be spies for MI6.

The series — made by an institute believed to be affiliated to the elite and hardline Revolutionary Guards — “is a lie from the beginning to the end” that “damages foreign policy more than me” by fuelling public mistrust, Zarif said.

By focusing on the nuclear talks, the Guards’ motive goes beyond creating compelling drama, reformist analysts say. Iran is in discussion with western powers about reviving the nuclear deal, a key reformist achievement, and hardliners want to deter the popular foreign minister from declaring his interest in the presidency in what is a crucial election year.

“I’ll be grateful to Gando-makers to let us continue our current job,” Zarif said this month, and commented that he would not run for the presidency.

The possibility of nuclear talks with the US and other powers has complicated an already fraught Iranian political scene ahead of the June election. Many reformists are pinning their hopes on Iran’s top diplomat to reinvigorate the nuclear deal and boost support at the ballot box. Hardliners might prefer to negotiate the deal themselves after the election. The polls are also seen as particularly crucial in case supreme leader Ayatollah Ali Khamenei, 81, dies during the next president’s term.

Pendar Akbari, left, and Ashkan Delavari, right, in a scene from ‘Gando’
Pendar Akbari, left, and Ashkan Delavari, right, in a scene from an episode of ‘Gando’. The series title refers to an Iranian crocodile able to distinguish its friends from its enemies © Bahar Asgari/Shahid Avini Cultural and Artistic Institute via AP

The purpose of Gando, which refers to an Iranian crocodile able to distinguish its friends from its enemies, “is to tell Zarif that should he dare to announce his candidacy, he will be destroyed immediately,” said one reformist analyst. “When the intelligence service of the Guards truly believes in the Gando plot lines, it means even if Zarif decides to defy such warnings, he will not be allowed to run.”

Centrist president Hassan Rouhani is due to step down this year after two terms and it is not yet clear who the presidential candidates will be. Politicians register as late as May and then have to be vetted by the Guardian Council, the hardline constitutional watchdog, which can disqualify nominees. Potential hardline candidates include Mohammad Bagher Ghalibaf, the parliament speaker and a former guards commander; Ebrahim Raisi, the judiciary chief; and Ali Larijani, a former speaker of parliament. On the reformist side, speculation has centred on Es’haq Jahangiri, first vice-president, Hassan Khomeini, a grandson of the founder of the Islamic republic, and Zarif.

A US-educated career diplomat widely respected in the west for his pragmatism, Zarif was instrumental in the historic deal in 2015, under which Iran curbed its nuclear activity in exchange for the lifting of sanctions. But Donald Trump abandoned the accord in 2018, imposed sanctions, including on Zarif, and said he would pursue a new accord to contain Iran’s regional and military policies. The US move emboldened hardliners, confirming to them the untrustworthiness of the US.

Zarif’s background in the US both as a university student and as Iran’s head of mission at the UN — during which he met US politicians including then senator Joe Biden — has long made him a source of suspicion for hardliners.

This wariness of both Zarif and the west is evident to viewers of Gando, as is the heroism of the Revolutionary Guards. Mohammad, the action hero protagonist, warns that western negotiators may sabotage refineries as part of nuclear talks. Mohammad works out of elaborate facilities akin to those in a James Bond film. The fictional foreign minister is advised by a media adviser, the main culprit, “to enter into direct talks with the US and accept the conditions of the leader of the global village”.

Vahid Rahbani in a scene from an episode of ‘Gando’
Vahid Rahbani in a scene from an episode of ‘Gando’. State TV abruptly stopped broadcasting the series that was less than halfway through its 30-episode run © Hassan Hendi/Shahid Avini Cultural and Artistic Institute via AP

The dramatic scenes reflect, in part, the worldview of some of Zarif’s critics. “Reformists, Mr Zarif and his lobby group in Washington [Iranian dual nationals] should be wiped out from Iran’s politics,” said an aide to a senior hardline politician who is a potential presidential candidate. “We have to get rid of this cancerous tumour once for good.”

Gholamali Jafarzadeh, a former conservative member of parliament, said Zarif “is not a good statesman and should not run for president” while “reformists should know that their choices have no chance to be allowed to run”. 

This month, state TV abruptly stopped broadcasting the series that was less than halfway through its 30-episode run. Local media said broadcasts would resume when the presidential race was over. Iran’s centrist president Hassan Rouhani, whose signature achievement is the nuclear deal — alluded to the show on Wednesday and said “people’s money” should not be spent on “fabrication of the truth” and “distortion of facts”.

After three years of sanctions, many voters are disillusioned by the infighting and the prospect of real change, whatever the outcome of the election. “Whether Zarif or a figure more senior than him runs or not, I’m not going to vote,” said Hamid, a 40-year-old engineer. “Let the Guards win the election as they are the ones who are running the country anyway. Why shall I make a fool of myself?” 

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Rising inflation complicates Brazil’s Covid-19 crisis




After seven months in lockdown, Michele Marques received some unwelcome news when she returned to work: while she was away the prices of almost all the products she uses as a hairdresser had soared.

“A box of gloves rose 200 per cent. Colouring products increased at least 100 per cent,” said the 37-year-old from São Paulo, underlining how costs were rising while her revenue had collapsed. “I had to raise the price of my services, too.”

It is a dynamic that is playing out across Brazil, adding an extra layer of complexity to the country’s coronavirus crisis, which has already claimed the lives of almost 350,000 individuals and pushed hospital services to the brink.

With much of Latin America’s largest economy being shuttered, inflation is surging to its highest level in years, fuelling a silent scourge of hunger among poorer citizens that has run in parallel to the Covid-19 pandemic.

“The high price of staple foods — rice and beans, for example — has led to the disappearance of these items from the table of millions of Brazilians,” said Ana Maria Segall, a researcher at the Brazilian Research Network on Food and Nutritional Sovereignty and Security. In the 12 months to the end of March, the price of rice increased 64 per cent and black beans 51 per cent.

“In Brazil currently food inflation has penalised the very poorest, preventing them from having adequate access to food and in many situations leading to hunger,” she said, adding that rising unemployment and the curtailment of social programmes were also contributing factors.

Volunteers hand out food in São Paulo © Alexandre Schneider/Getty Images

Less than half of Brazil’s population of 212m now has access to adequate food all the time, with 19m people, or 9 per cent of its inhabitants, facing hunger, according to a recent report by Segall’s group.

“I’m doing some odd jobs, but it’s not enough to keep us going,” said Jonathan, a 28-year-old who lost his job in the kitchen of a Chinese restaurant in São Paulo when the pandemic began. He said he now struggles to provide enough food for his three young children and pregnant wife.

On a 12-month basis, inflation in June is expected to surpass 8 per cent, far above earlier estimates. In the 12 months to March, food prices jumped 18.5 per cent, while the price of agricultural commodities in local currency surged 55 per cent and the cost of fuel increased almost 92 per cent.

Line chart of Percentage increase over past 12 months showing The price of rice in Brazil is soaring

The developments pose a fresh challenge to President Jair Bolsonaro, who is already under fire for his handling of the Covid-19 pandemic. Across Brazil’s biggest cities, graffiti has sprung up labelling the populist leader “Bolsocaro” — a portmanteau of his name and the Portuguese word for expensive.

The rising prices are also likely to provide useful ammunition to leftist former president Luiz Inácio Lula da Silva, who returned to the political fray last month and may challenge Bolsonaro in elections next year.

“Bolsonaro is to blame for the increase in food prices, he is to blame for everything. They have to remove this guy,” said Maria Izabel de Jesus, a retiree from São Paulo.

Armando Castelar, a researcher at the Brazilian Institute of Economics, said the government had underestimated inflation both in terms of the numbers and also “how much a concern it should be”.

He attributed the rising prices to the devaluation of the Brazilian currency, triggered in part by the stimulus packages passed by the US government — which helped to bolster the dollar and led to higher Treasury yields — and the brighter economic outlook outside Latin America.

“You have a situation where commodity prices are going up because the global economy is going to grow a lot this year. With the growth in the US, interest rates are going up and the dollar is strengthening. This puts a lot of pressure on the exchange rate in Brazil and emerging markets in general,” he said.

As the spectre of inflation loomed last month, the Brazilian central bank raised its key interest rate by 75 basis points, higher than the half-percentage point many economists had expected. A further rate rise is expected next month.

“The central bank acted correctly, but it cannot stop there. It is important not to be too lenient in dealing with this,” said Castelar.

Silvia Matos, a co-ordinator at the Brazilian Economy Institute, also pointed to Brazil’s weakening currency as a contributing factor to inflation. But she said the slide in the real was triggered by investor concerns over Brazil’s deteriorating public finances.

Following the creation of two separate stimulus packages to mitigate the impact of Covid-19, government debt has risen to about 90 per cent of gross domestic product, a high level for an emerging market economy.

The rollout of the second of these packages began this month, with 45m Brazilians set to receive $50 a month for four months.

Critics said, however, these stipends were not nearly enough to keep people both fed and at home in lockdown.

“It is essential that the emergency aid is of a greater value, so that people do not leave the house but no one also stays at home starving,” said Marcelo Freixo, a federal lawmaker with the leftwing PSOL party.

“We need to reduce the circulation of the disease. Brazil is already experiencing 4,000 deaths per day. We will reach 500,000 total deaths by the middle of the year.”

Matos says that inflation had hit poorer citizens much harder than middle-class and rich Brazilians because a larger portion of their income was dedicated to food, the price of which has increased substantially.

“The only thing that could help right now is to get out of this pandemic,” she said.

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Can CVC pull off a $20bn ‘deal of the century’ at Toshiba?




Proposed management buyout looks like an improbable win for the Japanese conglomerate’s embattled CEO

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