THE CLOTHES MAKETH THE MAN?

He has been called the unsweetened version of Alan Sugar and heavy-handed; he claims to be determined, focused and forthright, and that he never bears a grudge. He’s renowned for not mincing his words, and the people who have an opinion seem fairly equally divided between those who think he’s the best thing retail has ever seen and those who wouldn’t give him house room.

It’s hard to dispute that he’s a multi-talented entrepreneur and one of Britain’s most successful retailers, but there’s also been acres of print given over to the debate about whether he is a wheeler and dealer who buys and sells businesses for the good of his own pocket.

Green has kept alive or revived many existing brands that were looking decidedly sickly before he threw his weight and financial muscle behind them. In his more triumphant moments, he has been hailed as the finest retailer of his generation and one of the best business brains in the UK; at other times in his career he has received criticism for taking too much money out of his businesses and under-investing. He claims to increase profits through efficiencies in operation costs and the supply chain, although those on the receiving end have said this felt more akin to turning the lights down, cutting costs and squeezing his suppliers. In the past, his critics have been quick to point out that he is not so effective in building sustainable businesses that attract more customers, but his success with Topshop has proved them wrong.

He’s a man who’s hard to pin down. For every friend he has a detractor, for every critic a supporter. There is simply no consensus to be found on any aspect of the man and his career. So who’s opinion to believe? I can’t make that judgement. What I can say is that when I met and interviewed Philip Green for a BBC radio documentary recently, I left his office as a fan.

Yes, he’s blunt and forthright, and it’s easy to see how some of his employees and associates could find his manner difficult to deal with. But he’s willing to admit he doesn’t get it all right all of the time and that he, along with every other retailer in the high street, has to keep reviewing his business tactics and strategy in light of new and increased competition, and adverse economic conditions.

I felt he was realistic; driven, determined, focused, possibly ruthless, impatient, according to staff insiders sometimes bad tempered, determined to do things his way - but above all, realistic. His friends claim he is the way he is because that’s what it takes to succeed in the tough retail environment; his detractors say that’s no excuse for his sometimes overbearing behaviour.

When I asked him what the biggest mistake he’d made in his career was he told me it had been talking to me for the last hour. Rude? I don’t think so: just his way of being humorous, and he did share his sweets with me - always the way to my heart. He certainly wasn’t the difficult person I’d been warned to expect and I came away feeling he was tough but fair.

To balance my views I’ve enlisted the help of two analysts to give me their take on the maestro’s performance over the past couple of decades. They’re a retail analyst and a business analyst with, between them, 60 years of high street experience.

SETTING OUT

Philip Green was a Croydon-born, middle class Jewish boy who left school at 15 without a single qualification. It’s become a bit of a cliché in the business world - it’s almost de rigour to leave school as soon as allowable having achieved as little as possible academically. It’s probably fairly common among entrepreneurs because even at school they have the traits of the entrepreneur - restlessness, impatience, a desire to be making money, a low tolerance threshold, the vision to see themselves elsewhere - none of which translates into good marks in the classroom.

Now in his late 50s, Philip is number six on the latest Sunday Times Rich List, up from ninth in 2008 despite - or perhaps because of - the recession. He’s estimated to have around £3.8 billion in his personal coffers, for family futures or for his next high street acquisition. Impressively, he’s reported to have made his first billion quicker than anyone else in British history and, once the first was made, the others swiftly followed. So how did Philip Green build his business empire? How did he get from an academically challenged teenager to the owner of the Arcadia Group, which runs about 12% of the UK clothing market?

It’s fairly easy to chart Green’s march along the high street from 1992. Most of his recent ventures have been the subject of intense press and media interest. But it’s less easy to unearth the exact detail of his early and less successful enterprises. It has also been difficult to obtain many details of how he runs his operations, and his personality still remains something of an enigma.

THE CHILD IS THE FATHER OF THE MAN

Philip Green was born in 1952 on 15 March (known by every Shakespeare scholar as the Ides of March - a day to be feared!). His parents, Simon and Alma Green, already had a daughter, Elizabeth, and were an enterprising, well-to-do Jewish family. Both ran small businesses: his father ran electrical businesses and rented out TV sets, and his mother ran laundrettes and petrol stations. TVs and washing machines were the stuff of dreams for many people in the 1950s, so the Greens were ahead of their time. They also owned properties through a small property company. Philip has called them ‘business obsessed’, and his attention to detail is likely to have been either inherited or learned from them.

Philip was sent to an academic boarding school. Being away from the family at boarding school is traumatic for most children but it must have been much more so when Philip’s father died of a heart attack in 1964 when Philip was 12. The adult Philip has been described as difficult, always looking for affirmation and confirmation from his peers that he’s the best despite his protestations that he doesn’t care what others think. A psychiatrist may look to the early death of his father for the source of some of those traits. Having been sent away to school at nine, he’d had little time to form a relationship with his father and his relationship with his mother was closer. He said in an interview with the Daily Mail in 2004 that ‘she’s been my biggest influence and my role model. She was the strong one, good at business and very determined.’²

Whatever the impact of his father’s early death, Philip Green seems to have had few friends at school afterwards and he certainly wasn’t academic. He spent his weekends and school holidays helping his mother with her businesses. At the petrol station he cleaned windscreens, changed oil and earned tips from the customers - and seems to have acquired the taste for both business and money. Sitting in a classroom can’t have been easy for a boy who was learning about business outside of it and who was naturally inclined to be out there making money.

But academic failure often spurs people on to make their mark later. It could be that their position in the school league table leaves them with a desire to be better than the classmates who look down on them and gives them the determination to make it big in some area of life. Green came from a business background and many entrepreneurs with business in their blood, who leave school with few qualifications, attribute a degree of their success to that desire to thumb their noses at their former classmates.

APPRENTICESHIP

When Philip left school in 1968 his mother encouraged him to go into business. He may have had no qualifications and started at the bottom, but he was from a relatively well-off business family that provided him with some money and contacts. He was left some money by his father. Having learned a lot from his parents about running businesses, he saw the advantages of owning properties that can be used for raising business finance, and his mother used her connections to get him an apprenticeship in the wholesale shoe trade.

Fashion was undergoing a real revolution at the time Green started work. People, particularly young people, wanted something new and fresh. They wanted ‘fashion’ instead of ‘clothes’. Prices were falling too. People wanted to buy more, cheaper items. It was no longer enough to have one dress or jacket, but there wasn’t a great deal more money with which to build up a decent wardrobe, so bargain hunting was the order of the day. Retailers were beginning to look for clothes made outside the UK to save costs and bring prices down.

The shoe company Philip was working for did business with Hong Kong and so he had an early insight into how that type of business operated. At first he worked in the warehouse and as an errand boy, running around London with samples to show prospective buyers. He certainly started at the bottom and worked his way right to the top. After about four years in the business, Green was allowed to sell at shoe exhibitions. He did a deal on 40,000 pairs. His boss bet him £5 that he wouldn’t get the order. He did. It was his first order and his boss paid the money … although Green found himself having to hand it back a few weeks later when the order was cancelled! The shoe trade was a great grounding for Green and may well have had a strong influence on his approach to business today.

On his 21st birthday, Green joined the family property company, Langley Road Investments, but the fashion business was where he wanted to be. He was starting to understand the industry and it was well suited to his restless entrepreneurial mind, since it was an industry that was changing at a fast pace. Even then he was always on the lookout for the next trend and working out what customers wanted to spend money on. The money he’d been left by his father and a business loan launched the would-be entrepreneur into the business world.

THE FUTURE’S BLUE

Denim was becoming popular in the early 1970s and Philip Green saw its potential. Early on he was proving that he had an eye for future trends and was willing to grasp opportunities. He was one of the first to source jeans from Hong Kong.

Throughout the 1970s and into the 1980s he ran several businesses, usually with his mother, that were ultimately unsuccessful. He had a shop called Bond Street Bandit; a business called Cupcraft that went bust in 1982; another, Tarbrook, a clothing importer and wholesaler, was wound up a year later, with debts of £239,000 and assets of just £436; in 1983, he became a director of Buzzville, a women’s clothing manufacturer 50%-owned by his mother, but again it went into voluntary liquidation; and there was the Joan Collins Jeans Company, which was set up in 1981 but, thanks to a lack of interest in Joan Collins, went under a year later.

Green has been reported many times to have said that he never managed to start anything successfully himself - but as the next phase of his career was to prove, just because he hadn’t started up a successful business didn’t mean he couldn’t take over and successfully turn around failing businesses and make them work. It was this ability that was to become the trademark of his earlier career and make his original fortune.

Most successful entrepreneurs don’t make money out of their first, second or even third ventures. They’re likely to have a few under their belt before they happen upon the one that makes their name and fortune. Most people don’t know about running a business until they’re in business and then they learn as they go along. Philip Green was no different and he certainly did learn, throughout the 1970s, some vital skills that he used to great advantage later; how to do deals with suppliers and how to work out what customers want to buy and at what price.

By the time Green had been in the rag trade for 15 years, he hadn’t made any real money. He’d had several businesses wound up by receivers, an experience that can be very disheartening for many and ultimately drive them out of business. But Green was made of sterner stuff and he certainly had no intention of giving up. And just to prove that nothing goes to waste in business, it was his experience of business failures that gave him his next opportunity. Green was just getting started.

TURNING THINGS AROUND

Over the next few years, denim and failing businesses were a winning combination for Green. He concentrated in rescuing and turning the businesses into viable operations to sell on. The owner of the ailing business Bonanza Jeans, a clothing wholesaler, contacted Green because of his experience with companies facing liquidation. Green raised the money to keep Bonanza afloat, took ownership of two-thirds of it and left a grateful owner with one-third of a viable business. The money came from mortgages on properties owned by the Green family property business and a mortgage on the assets of Bonanza Jeans in Taunton. Green had learned the value of being able to raise money quickly and how owning property was the key to being able to raise much needed cash. He also knew that owning a third of a viable, growing business is much more appealing to most business people than owning 100% of a bankrupt business, so he could make money out of these deals. The empire was beginning to grow.

Green then went about recovering debts owed to Bonanza from a company called Jean Jeanie, another denim retailer. As it turned out it was ailing too, but Green saw it as another opportunity and bought it too. He told The Guardian: ‘I could see what had happened … Bad buying, no discipline, no control, old stock, indecision, time-wasting, corporate thinking … [I] got the business back to breaking even in four months.’³

And so it was after those four months when Green announced that both Bonanza and Jean Jeanie were back in profit. He had restructured, cut out many of the suppliers, bought straight from manufacturers in China and Hong Kong, renegotiated contracts and saved money to refurbish some of the shops. About six months after he got involved with Jean Jeanie, he did a deal worth £7 million with the big British jeans wholesaling company Lee Cooper, repaid Jean Jeanie’s overdraft and his debts to the bank, and had money in his pocket. It was hailed as the success story of the 1980s and made Green a fair return on his investments. Lee Cooper set up a retailing arm with Green as managing director. But despite a good salary and the possibility of earning millions of pounds over the following three years, based on company profits, Green didn’t enjoy the restrictions of having a board to answer to and left about a year later.

A STUMBLE

Green had earned his reputation as a deal maker and a problem solver. And he’d had his first taste of working with a board and found it not to his liking. But that didn’t stop him trying his hand at running a public listed company. In 1988, Green put his problem-solving skills to work on rescuing Amber Day, the fashion business. Green put in a large amount of his own money and became chairman and chief executive. Amber Day acquired 13 Review stores and, in his first year in charge, Review made a profit of £1 million. Green then bought the Woodhouse group in 1989. He was grabbing headlines for Amber Day, relentlessly promoting the company to his contacts and courting publicity. Interest and headlines in the business pages pushed up the share price. The transformation was spectacularly rapid. He restructured, opened new stores and set up licensing deals in Europe.