Arcadia Group is the UK's #2 clothing retailer (behind Marks & Spencer), home to a collection of seven chain store brands led by Topshop and Burton. Known until the beginning of 1998 as Burton Group, the business has changed shape several times since its original heyday in the 1980s. After performance slumped in the 1990s, Burton went on a crash diet, spinning off several brands including department store Debenhams to create a leaner and more focused group. In 2002, the revived and renamed business was acquired by retail entrepreneur Philip Green, whose portfolio already included rival Bhs. Green engineered a dynamic return to form, building Topshop into one of the UK's most fashionable chain brands, and expanding its presence into other markets, most recently the US. Although both owned by Green, Arcadia and Bhs remained separate businesses until summer 2009. In 2015, Green sold the now ailing Bhs to a consortium of investors.
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Adbrands Weekly Update 2nd Mar 2017: British fashion tycoon Sir Philip Green finally agreed to do the right thing in relation to failed clothing chain Bhs, which collapsed in 2016 after Green sold it for next to nothing to a would-be entrepreneur with no retail experience. Green had extracted payments in excess of £1.4bn from the company in the early and mid 2000s, but when Bhs failed 11,000 employees lost their jobs and thousands more were left with a gaping £570m hole in their pension fund. The tycoon, who had at the time just taken delivery of his second multi-million pound super-yacht, was put under intense pressure to plug that hole, but appeared to be dodging that moral responsibility. The public row culminated in a vote by British MPs to recommend the "billionaire spiv" be stripped of his knighthood. After ten months of tough negotiations with the Pensions Regulator, Green has now paid £363m into the Bhs pension fund to settle his moral responsibility for the fiasco. The regulator has in return dropped legal proceedings and declared itself "satisfied" with the outcome. His willingness to dig into his own pocket to make good set a new precedent for any UK businessman, for which Green deserves some credit. But in reality, the sheer weight of public and political pressure on him to do so made any refusal all but impossible.
Adbrands Weekly Update 27th Oct 2016: British MPs voted unanimously to recommend that Arcadia chairman Sir Philip Green - described by one as a "billionaire spiv" - be stripped of his knighthood as a result of the sale of retail chain BHS to an inexperienced buyer and its subsequent collapse. A string of MPs from different parties addressed the House of Commons to voice their condemnation of Green's actions, which resulted in the loss of 11,000 jobs and a huge shortfall in the chain's pension fund. Although Green promised in June to "sort" the financial impact of BHS's collapse on its employees and pensioners, no concrete proposal has yet been made. MPs have no direct influence over the honours system, but their motion will be taken under consideration by the relevant committee. Green responded by publishing legal opinion sought from two leading barristers which called the Commons debate "unfair" and "biased".
Adbrands Weekly Update 16th Jun 2016: Topshop owner Sir Philip Green was subjected to a marathon six-hour interrogation by the parliamentary committee looking into the collapse of BHS, part of Green's Arcadia Group until 2015. He delivered a robust and confident performance, but admitted his sense of shared responsibility in the chain's downfall. "I spent 15 years — a third of my professional career — at BHS and, if anything, I had too strong an emotional tie to it. I apologise to all of the BHS people and hope to find a sensible solution.... Nothing is more sad than how this has ended." He refused to accept allegations made by BHS's final owner Dominic Chappell that he had in effect caused the chain to call in administrators by blocking its sale to another High Street rival, Sports Direct. However he did acknowledge that he contributed to its failure by selling it to Chappell, a would-be entrepreneur with no retail experience. "I believe if the business plan had been followed, BHS would not have gone out of business.... I picked the wrong guy." The key issue, though, is how to plug the failed chain's £571m pension deficit. "It is resolvable, sortable, and we will sort it," Green told MPs. "I want to give assurance to the 20,000 pensioners that I am there to sort it... You have my commitment that I am planning to sit down with the pensions regulator. Trust me, I want to get this over quicker than you do."
Adbrands Weekly Update 9th Jun 2016: A host of other retailers are expected to pick over the corpses of collapsed British fashion retailers BHS and Austin Reed. BHS followed Austin Reed into liquidation this week after attempts to find a buyer for the business failed. Around 11,000 BHS staff are likely to lose their jobs, though some may find employment with the likes of Primark, Next and H&M, who are among the rivals examining the two store estates. Other potential buyers of individual sites include Sports Direct and discounters such as Wilko and Poundland. Meanwhile, BHS's final owner Dominic Chappell, whose Retail Acquisitions Ltd vehicle acquired the business a year ago from Sir Philip Green's Arcadia Group, was subjected to a brutal marathon grilling by a parliamentary committee seeking answers to why the business failed and how its pension deficit grew so huge in such a short time. Chappell pinned the blame on Green, who he said had blocked a last-minute attempt to sell BHS on to another high street tycoon, Sports Direct's Mike Ashley. However, BHS management pointed the finger at Chappell, described by the store's former financial advisor Michael Hitchcock as a "Premier League liar, and a Sunday pub league retailer". Sir Philip Green will himself be up before MPs next week, and can probably expect an even rougher ride from MPs and the media.
Adbrands Weekly Update 28th Apr 2016: Long-established British fashion and furnishings chain Bhs called in administrators after emergency talks to rescue the business failed over the weekend. It is the biggest failure of a UK retailer since Woolworths in 2008. A buyer for the current business as a going concern is unlikely; and its 175 stores are likely to be sold off piecemeal. There are several factors at play here, including Bhs's old-fashioned apparel, dilapidated stores and exorbitantly expensive property leases. However, up to 11,000 jobs are at risk from the collapse, and the group's pensioners face a huge funding deficit of over £570m. Media attention has inevitably turned to former owner Sir Philip Green, the brash Topshop tycoon. British Home Stores had already fallen on hard times before it was acquired and renamed by Green in 2001. He successfully turned it around, before switching his attention towards another retail target, Topshop owner Arcadia Group. However, the Bhs turnaround didn't last, and performance had begun to flag long before Green sold the business just over a year ago for a nominal sum to entrepreneur Dominic Chappell, a former racing driver with virtually no retail experience. Yet Green and his wife - in whose name the business was registered - extracted around £580m in dividends and other benefits from Bhs during the years that they owned it. They are reported to have offered around £80m this week to help plug the yawning gulf in the store's pension scheme. They may be asked by regulators to provide more. Just a day after the Bhs collapse, another venerable high street brand Austin Reed also called in administrators.
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Free for all users | see full profile for current activities: Burton's was originally founded in 1904 by Moshe Osinsky, a Jewish refugee from Lithuania who had arrived in the north of England a few years earlier. Osinsky changed his name to Montague Burton, and opened a tailor's shop in Chesterfield. By 1910, he had 14 shops in and around Sheffield and Leeds. On the outbreak of World War I, the company secured a huge government contract to supply army uniforms, and prosperity continued into the early postwar period. Business boomed as recently demobbed soldiers created a huge market for everyday men's clothing. By the early 1920s, sales had grown to over £1m, and the company floated in 1929. Those additional funds paid for further expansion and by the 1930s Burton was a household name throughout the country. The business continued to expand until there were more than 600 outlets nationwide by the late 1940s. By the time its founder, now Sir Montague Burton, died in 1952 the company was the world's largest menswear retailer.
In 1946, Montague Burton had also moved into the womenswear market, acquiring the Peter Robinson fashion chain. In 1964, Peter Robinson launched a spin-off chain, Top Shop, targeting fashion-conscious "swinging 60s" women. The company, now Burton Group, continued to expand into different niche areas, acquiring outsize fashion chain Evans in 1971 and Dorothy Perkins (founded in 1919) in 1979. In the 1980s, Principles was launched to provide fashionable clothes for working women. However the hostile takeover of department store giant Debenhams in 1985 after a bidding war against Mohamad Al-Fayad, along with speculations in the property market, finally stretched the group too far. Performance slumped in the recession of the early 1990s. Harvey Nichols, acquired as part of Debenhams, was sold in 1991. In a bid to extend its coverage the group moved into mail order mid-decade, acquiring Innovations (later sold to GUS), Hawkshead and Racing Green. In 1997, the decision was taken to demerge Debenhams as an independent company, a process completed a year later. The main business rebranded at the same time as Arcadia Group. Although the group regained its stability in the early 2000s it was increasingly identified as a takeover target.
A brash and aggressive self-taught businessman, Philip Green had first made his name in the fashion industry during the 1980s, buying and selling the Jean Jeanie denim retail chain at a huge profit before mounting a takeover of quoted discount clothing retailer Amber Day towards the end of the decade. Forced out of that company by shareholders in 1992 as a result of a downturn, Green began a new career as a corporate raider, buying a series of different struggling chains, turning them around and selling them on at a handsome profit. He made his first acquisitions in 1994, department store chain Owen Owen and discount menswear chain Mark One. Over the next few years he picked off a series of other chains from the ailing Sears fashion group, which was steadily divesting its huge portfolio of different UK stores.
In 1997 and 1998, Green acquired Olympus Sports and Shoe Express from Sears, turning them around and then selling them on to other owners. In 1999, after a brutal takeover battle, he acquired for a knockdown price what remained of Sears, including mail order giant Freemans, and chain stores Wallis, Miss Selfridge, Warehouse, Richards and Adams. Over a matter of months, all these too were sold on, earning Green an estimated £180m profit. Freemans was sold to Otto Versand of Germany, Adams to management, and the Sears womenswear chains to Arcadia. This left Green free to pursue a new target. After making a first tentative run at Marks & Spencer, he set his eyes instead on another legend of the British high street, Bhs.
Bhs had been founded in the late 1920s as British Home Stores, a single outlet in south London selling a variety of home products and clothing, with all goods priced at less than a shilling. In 1931 the business went public and expanded steadily, eventually abandoning its low-price policy after World War II in favour of well-made but still affordable clothing. In 1986 the company was acquired by Terence Conran's Habitat Mothercare group to form Storehouse, and was relaunched under the name Bhs, the acronym by which it was already widely known. However Storehouse struggled to compete with other retailers and, following a series of boardroom battles, was broken up in 2000. Green's offer of £200m for Bhs included more than £50m of his own money, and he was able to engineer a dramatic turnaround of the business in just 18 months, tripling profits, and making himself another fortune in the process.
That success earned Green new respect in the business community, giving him greater freedom to make even more ambitious acquisitions. Now he turned his attention back to Arcadia. Despite a considerable improvement in performance since the early 1990s under new CEO Stuart Rose, Arcadia was effectively considered to be in play after fighting off a takeover bid from Icelandic retail group Baugur. The company had already restructured its portfolio, having spun off several brands, including Warehouse and Principles, into a joint venture with managers under the name Rubicon Retail. After a series of to-and-fro bids during the summer of 2002, Green finally won over Arcadia's shareholders with an offer worth £850m. He sold off the group's remaining shares in Rubicon following the successful takeover.
Two years later he mounted a new raid on Marks & Spencer, now under the management of former Arcadia chief Stuart Rose. After several months of occasionally angry sparring with the M&S board, Green abruptly dropped his takeover bid in summer of 2004. (See Marks & Spencer profile for details). See full profile for current activities
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