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Abu Dhabi, UAEWednesday 14 November 2018

UK retail tycoon Philip Green in a tight spot

As his Arcadia group declines, chairman of Topshop clothing chain unmasked as the “leading businessman” at the centre of harassment and racism allegations

Philip Green is the focus of allegations of sexual harassment and racial abuse and his Arcadia group is in trouble. AP
Philip Green is the focus of allegations of sexual harassment and racial abuse and his Arcadia group is in trouble. AP

The rise of Britain’s Topshop clothing chain to become one of the country’s most lucrative fashion franchises has long been regarded as a prime example of UK retail excellence.

But behind the sheen is a hitherto little-known dark side; a culture of fear around its chairman Sir Philip Green. Now, a key executive at the group has shone a very public a light on the situation.

Jane Shepardson worked as brand director at the chain from 1999 to 2006 when Mr Green, worth about £2.7 billion (Dh12.86bn) according to the Bloomberg Billionaires Index, spearheaded its rapid expansion. She has described how she shielded her staff from tirades from the boss. “There was an awful lot of bullying and I think there still is,” she said. “I felt it was my duty to protect my team from that. If he came to the buying floor someone would come and get me.

“And then I would take him to the lift. I just thought 'well if they’re working for me, why should they be shouted at?'”

A steady flow of revelations about Mr Green has penetrated the customer base, posing challenges for management in an already tough retail environment. In London’s Westfield shopping centre, customers browsing around Topshop, founded in northern England in 1964, and its counterpart Topman are well aware of the recent scandals surrounding the chairman.

Mr Green is hardly the face of the brand but his unmasking last week as the “leading businessman” at the centre of sexual harassment and racism allegations has thrown the retail tycoon into the spotlight. The 66-year-old billionaire is the chairman of multinational retail company the Arcadia Group, which, alongside Topshop and Topman, owns British high street stores Miss Selfridge, Burton, Dorothy Perkins, Wallis and Evans.

While the full extent of the allegations is not known, Mr Green’s unveiling has made some Topshop customers The National spoke to feel uneasy about spending their hard-earned cash in one of his stores.

FILE - 25 OCTOBER 2018: Retail business man Sir Philip Green has been named in Parliament for sexual harassment of staff HONG KONG - JUNE 06: Sir Philip Green the owner of Topshop and Taiwanese actress Gwei Lun Mei cut a ribbon to mark the opening of the new Topshop store as TV host Mandy Lieu watches on June 6, 2013 in Hong Kong, Hong Kong. Gwei Lun Mei is the the first Asian ambassador of Topshop. (Photo by Jessica Hromas/Getty Images)
Topshop, like other Arcadia Group brands, is in the spotlight. Getty

“I’d read that he’d been accused of harassment and it does make me think twice about shopping here,” said Rowan, 24, after visiting Topman. “But I wouldn’t boycott his stores until I know exactly what he is said to have done.”

Priya, 13, on a half-term shopping jaunt with friend Tash, also 13, said she became aware of Mr Green following the collapse of BHS, the retail chain he sold for a nominal £1 in 2015 leaving a £571 million hole in its staff pension fund.

“My dad doesn’t like me shopping in Topshop after the BHS collapse and pensions scandal,” said Priya. “If the [latest] allegations turn out to be true, I would probably avoid shopping here.”

Mother and daughter Anna and Evie said they would continue to shop in Mr Green's high street stores despite the ongoing scandal. Like many of the brand’s millennial core market, Evie, 17, only became aware of who the British businessman was very recently.

“I didn’t know he owned Topshop,” she said. “So it doesn’t change my view on Topshop as a whole because I don’t associate him with it. It’s the clothes I come here for. But obviously I think it is awful if he has abused his power in any way.

“I think he is a dreadful man,” said Anna. “But it’s not going to stop me shopping here at the moment until we know exactly what he has done and who he has done it to.”

Mr Green has denied any allegations of wrongdoing.

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Read more:

Topshop's Philip Green named over harassment allegations

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"To the extent that it is suggested that I have been guilty of unlawful, sexual or racist behaviour, I categorically and wholly deny these allegations," he said after his identity was revealed by Lord Peter Hain in parliament under parliamentary privilege. That came after the clothing tycoon had spent more than £500,000 in legal fees to try to prevent the media from naming him.

A larger-than-life character often photographed by the paparazzi sunbathing on his 300 foot yacht, Mr Green was honoured with a knighthood by Tony Blair’s Labour government in 2006 for his services to retail and was in 2010 appointed as a “business czar” by former Conservative prime minister David Cameron.

But following various allegations over tax avoidance and the BHS pensions shortfall, Mr Green has faced renewed calls to be stripped of his knighthood, which were reignited again last week.

Retail commentators said it was not clear yet whether the harassment allegations would affect the number of customers visiting Topshop and Topman, the best performing of the stores in the Arcadia group. “It is very difficult to measure things like this,” retail expert Richard Hyman told The National. “When transactions are being made every few seconds, it is hard to establish why a particular sale has not been made.

“But what is not difficult to say is that this is the toughest trading climate that anyone’s ever seen in UK retail history.”

The fortunes of Britain’s high street retailers have been on a downward turn thanks to rising rents, the growth of online shopping and most recently an unseasonably hot summer.

Once the darling of the British clothing sector, even global brand Topshop saw its sales fall by almost 8 per cent last year compared with the year before. Out of its high street brands only Outfit gained sales in that period.

ARCADIA-BRANDS
Bleak house

“Arcadia’s trading profit is less than 5 per cent,” said Mr Hyman. “In this retail market you don’t need a large number of people to change their habits for the effects to be felt, in fact you only need a tiny sliver of people because sales volumes are so hard to win and easy to lose.”

The allegations against Mr Green might just be the latest in a series of scandals but they are another sign that the Topshop and Topman brands are losing touch with the young and increasingly socially conscious core market. For years already, under investment in online sales has seen technologically savvy young shoppers turn to digital-first stores such as Asas, Missguided and Boohoo, according to retail expert Zana Busby.

“The scarcity of technological innovation is reflected in the business and will ultimately be the downfall of Arcadia,” she said, "unless a change of culture sweeps through the business and does so quickly.”