“The City is furious with your behaviour, giving the image that business is not about creating wealth or jobs but nicking money off people,” said Frank Field, chair of the work and pensions select committee, to Arcadia Group finance director Paul Budge at the latest BHS evidence session today.
BHS joint select committee hearings
Field lost his temper with the group of Arcadia and Taveta directors who failed to answer who is ultimately to blame for the demise of BHS, as well as the 11,000 jobs at risk and 20,000 pensioners who may be out of pocket as a result of its collapse.
“We let ourselves down but so did Goldman Sachs, Grant Thornton, Olswang, Mark Tasker, Mr Bourne – a number of people let us down,” said Budge, who appeared alongside Arcadia Group property director Chris Harris and Brett Palos, director at Taveta Investments. Palos is also Sir Philip Green’s stepson.
“Isn’t that the core of capitalism that when something goes wrong, that person should be held to account?” asked Iain Wright, chair of the business, innovation and skills select committee.
But Budge refused to be drawn on Field’s assertion that “surely the buck stops on Sir Philip Green and Lady Green’s desk”, insisting that “a number of people” were to blame for the downfall of the high street chain.
Field said: “If Sir Philip was serious, he could fix the pensions issue today. What it needs is a very large cheque from the Green family who have done so well out of this exploitation.”
“We have had nothing but people coming here trying to disguise what has gone on,” he said angrily. “All along we have had to shoehorn things out of you.”
Green later released a statement saying Field needed to apologise for his “shocking and offensive” behaviour”.
“Mr Field’s outrageous outburst today demonstrated yet again his clear prejudice against myself, my wife and my executives, who turned up for a second time. He arrived very late, offered no apology, heard no evidence, clearly just to put on a ten minute show and was extremely rude. Accusing me and my family of theft is totally false and unacceptable on any basis.”
He continued: “The committee was yesterday made fully aware of the fact that a solution for the BHS pension funds is being worked on. His behaviour is as far as you can get from being helpful to anyone in this situation.”
Budge said that when BHS was sold it had “enough dowry, unencumbered assets and a turnaround plan” to survive, had the company voluntary arrangement (CVA) been implemented faster.
“Even with Dominic Chappell and Retail Acquisitions in charge,” he added.
Harris said: “There is no reason that we would want this business to fail, through the 12 or 14 months we were there to be supportive. We did not want these stores to fail, it was a disaster for us as we had our own concessions in there.”
Drapers revealed yesterday that Arcadia is set to lose around £100m in retail revenue through its Dorothy Perkins and Wallis concessions in BHS stores.
Earlier this morning, the joint select committees also heard from Mark Sherwood, former property director at BHS, who was tasked with finding £7.2m of savings from the department store chain’s rental bill across its property portfolio and a further £12.3m from the disposal of loss-making stores.
Sherwood said he managed to agree rent reductions totalling around £600,000 on two stores and had a “number of deals” lined up as disposals, but said: “We just ran out of time.”
“The pension was always there as a major issue, it was a factor in discussions with landlords,” he said.
He suggested that BHS also missed the presence of a “retail big hitter”, an experienced retailer that was part of the original turnaround plan, to be more proactive to market conditions.
“It was a rollercoaster, it wasn’t a downwards disillusionment spiral,” he said.
Sherwood also attested to Green’s “emotional attachment” to the BHS business.
“He sold a business he was emotionally attached to, he wanted it to succeed – it was his baby, I felt,” he said. “Whatever we were doing, he was peering over our shoulder seeing what we were doing. To let someone else get on with it wasn’t in his nature.”
Arcadia declined to comment.