Don’t like to say I told you so, but I did write in this column on January 31 that I would not be surprised to see Sir Philip Green produce a deal that no one saw coming for BHS.
But surely no one imagined he would unload his troublesome chain to a new company no one had heard of, run by non-retail corporate types who no one had heard of. And all for £1.
Since the story broke on March 12, the Drapers news team has been racing around trying to discover more about Retail Acquisitions and its dramatis personae. Drapersonline.com readers benefited from updates several times a day (if you haven’t done so, you really should get online with us). It is indicative of this tortuous story that two of the people mentioned less than a week ago - corporate lawyer Mark Tasker and corporate financier Stephen Bourne - are no longer directors. They were there just to get the deal done, apparently. The major shareholder in the new vehicle is former bankrupt and racing driver Dominic Chappell. He is obviously a man who likes a challenge.
What the transaction really means is still unclear. Green has gone to unusual lengths to stress that this is “an honest deal”. Well, why would it be anything but? He is reported to have demanded written assurances from the new owner that if it sold any of the company’s assets the cash raised would be reinvested into the business. That seems a very strange request. If you sell something, you sell it and move on, leaving the new owners to it.
How Retail Acquisitions can “move on” the 170-strong chain remains to be seen. It is widely accepted it was suffering losses of up to £30m a year as part of Arcadia. It has a £130m pension hole. It has a large number of long and expensive leases. And, most importantly, it is an irrelevance in today’s market. My eminent analyst friend Richard Hyman has been quoted as saying BHS has “lost its constituency”. I salute Mr H for devising a very appropriate phrase during an election campaign, and he’s right. As I said a few weeks ago, no one would miss BHS - with the possible exception of its 11,000 staff.
While considering the likely and unlikely scenarios regarding the former British Home Stores, I also began to wonder whether this was the first step in Green disposing of other parts of Arcadia. I have absolutely no evidence for this, but given the emphasis he and the media put on Topshop (and, to a much lesser degree, Topman), it seems to be overlooked that the group includes Burton, Dorothy Perkins, Evans, Miss Selfridge, Outfit and Wallis.
At the weekend, the retail knight was quoted as saying he had not had time to devote to BHS, but it is interesting to speculate how much time even a workaholic like PG can share among eight businesses. Given the complexity of modern fashion retailing with all its omnichannel and international ramifications, who could blame Green if he decided to concentrate on just Topshop (and possibly Topman) and let someone else have the others?
This colourful character, who has rarely been out of the headlines for 30-plus years, was 63 last Sunday. He could easily have another decade or more of running a fashion business, but maybe one or two might suit him better than eight. Selfishly, I hope he continues to provide us journalists with excellent copy for many a year.
Finally, a reminder that Drapers is having an ecommerce and digital festival on Thursday April 30 (details below). See you there, I hope.