Sir Philip Green admitted his retail chains had not moved quickly enough to adapt to the changing high street after creditors backed a restructuring plan that will involve the closure of 50 Arcadia Group stores and 1,000 job losses.

In an interview with BBC radio 4’s Today programme, he vowed to “get to work, grasp this new marketplace and get on with the job” to get Arcadia back on track. The company owns the Topshop, Burton, Dorothy Perkins, Topman, Wallis, Evans, Outfit and Miss Selfridge chains.

Green said: “The marketplace… has fundamentally changed forever. Whether we haven’t changed quickly enough or we had too many shops or whatever, I think it’s a combination of a lot of things. The answer is you can’t get it all right. For a long time the company made a lot of money, literally only in the last couple of years it fell off.”

As part of Wednesday’s rescue deal, Arcadia pledged to spend £135m on a turnaround plan, including £50m in revamping dowdy stores, to help it compete with rivals such as Asos, Zara and H&M.

Using expletives, the entrepreneur said the British public did not trust him because the media “make them all f**** jealous, it’s quite basic. These people writing all this shit couldn’t spell 50 quid. They all get jealous. The fact that someone can actually can write out a cheque and writes one out, people don’t like it.” He was referring to his £363m payment into the BHS pension fund in 2017 after coming under pressure from the Pensions Regulator.

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What’s the problem?

Physical retailers have been hit by a combination of changing habits, unseasonably warm weather, rising costs and broader economic problems. 2018 saw the disappearance of Toys R Us, Maplin and Poundworld as a result.

In terms of habits, shoppers are switching to buying online. The likes of Amazon have an unfair advantage because they have a lower business rate bill, which holds down costs and enables online retailers to woo shoppers with low prices. Business rates are taxes, based on the value of commercial property, that are imposed on traditional retailers with physical stores. 

At the same time, there is a move away from buying ‘stuff’ as more people live in smaller homes and rent rather than buy. Those pressures have come just as rising labour and product costs, partly fuelled by Brexit, have coincided with economic and political uncertainty that has dampened consumer confidence.

What help do retailers need?

Retailers with a high street presence want the government to change business rates. They also want more political certainty as the potential for a no deal Brexit means some are not only incurring additional costs for stockpiling goods but are unsure about the impact of tariffs after October 2019. Retailers also want more investment in town centres to help them adapt to changing trends, as well as a cut to high parking charges which they say put off shoppers.

What is the government doing?

In the October 2018 budget the government announced some relief on business rates for independent shopkeepers. It has also set up a £675m ‘future high streets’ fund under which local councils can bid for up to £25m towards regeneration projects such as refurbishing local historic buildings and improving transport links. The fund will also pay for the creation of a high street taskforce to provide expertise and hands-on support to local areas.

What is the outlook in 2019?

Some retailers could go under. Weakened by a difficult Christmas – which accounts for the entire annual profits of many retailers, and with further Brexit wobbles to come – retailers are facing a tough 2019. Another rise in the national minimum wage in April and the falling value of the pound against the dollar, which is used to buy goods in the Far East, have also added to costs and hit profits.

Green, who was long known as the “king of the high street,” has come under a barrage of criticism in recent years for pursuing a lavish lifestyle on his yacht in Monaco while his retail empire struggled. His other retail acquisition, BHS, went bust in 2016 after he sold it to a former bankrupt for £1. In 2005, Green and his wife paid themselves a £1.2bn dividend from Arcadia, the biggest corporate payout in British history.

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“That was 14 years ago,” he retorted in the BBC interview.

He denied that Arcadia had come close to collapse. Landlords of its 570 UK standalone stores approved the complex rescue plan on Wednesday, avoiding a collapse into administration that would have threatened a further 17,000 jobs.

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However, the former billionaire said: “It didn’t come close to collapse – we won the vote. It was a legitimate vote and it was won. Many more landlords clearly voted yes than no.”

The creditors’ meeting had been adjourned last week and to win over landlords, the Green family offered to put up about £9.5m a year over three years to reduce rent cuts for landlords to 25%-50% from the £30% to 70% previously planned. Green’s Monaco-based wife, Tina, who is the official owner of Arcadia, also agreed to pump £100m into the pension scheme over three years.

Green told the BBC: “You don’t want to end up having a car crash, do you? You don’t want to be in business and then see an ugly car crash and all the people out of work and you could have assisted, for however you got there, to rescue the business, why would you want to see that?”



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