Posts Tagged ‘Tony Blair’

Understanding capitalism, with Sir Philip Green

January 30, 2021

Tony Blair gave Philip Green a knighthood, in 2006.

Green had already been exposed as a tax-evading, foul-mouthed crook.

But Tony Blair thought him rich and charming. Just like he thought Saddam Hussein had Weapons of Mass Destruction. And that god talks to Tony in his sleep.

Well, here is today’s Guardian story about Green’s unravelled empire:

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About 1,100 unsecured creditors owed total of at least £51m expected to get minimal payout

Sir Philip Green’s family is likely to receive £50m from the sale of Topshop while more than 1,000 suppliers to the high street fashion chain are set to get less than 1% of the money owed to them.

A report by administrators into the collapse of Topshop and Topman seen by the Guardian reveals that the chains owed at least £51m to 1,155 unsecured creditors, who include clothing suppliers and landlords.

This figure does not include monies owed to HMRC. Administrators at Deloitte said the final debts for Topshop were likely to be “materially higher” once tax and money potentially owed to the group’s pension fund are included.

Unsecured creditors owed more than £1m include Daventry district council, for Topshop’s new distribution centre in the area, shopping centres including Liverpool One and Stratford City, and a number of clothing suppliers, including several in the UK and Turkey.Advertisement

At least 706 unsecured creditors to the six other chains in Green’s Arcadia Group fashion empire, which include Dorothy Perkins, Burton, Wallis, Outfit and Evans, are also owed at least £33m. These creditors are expected to receive at least some payout except those to Outfit, who are owed £252,000. All the chains’ debts are also likely to be far higher than the initial estimate which does not include money owed to HMRC.

Administrators say unsecured creditors of Topshop’s main operating company as well as its property and distribution centre arms are “likely, on present information, to [receive] a distribution of less than 1p in the £1”. Creditors to the German arm are unlikely to receive any of the £1.8m that they are owed.

As secured creditors, the Green family’s Aldsworth Equity, which is owed £50m relating to an interest-free loan it made to the group in 2019 at the time of an emergency restructure, will be paid before any funds are distributed to suppliers, landlords and HMRC. Administrators said the timing and amount paid to secured creditors would depend on the amount Topshop is sold for.

Online specialist Asos is in talks about buying Topshop, Topman and Miss Selfridge with the deal expected to total more than £300m.

Topshop’s parent company, another secured creditor, is set to receive £327.6m of the proceeds with up to £210m of that cash potentially set aside to pay down Arcadia’s pension deficit, which is estimated to be as much as £300m. Proceeds from the sale of Topshop’s London flagship store are also earmarked for the pension scheme, but it is not clear whether the property will fetch more than its £312m mortgage.https://www.theguardian.com/email/form/plaintone/business-todaySign up to the daily Business Today email

Administrators were called in last November after Arcadia suffered from poor trading and high costs. Topshop, the jewel in Arcadia’s crown which accounts for almost half the group’s sales, recorded a sales slide of 11% in 2019. Only Burton increased sales in the year to August 2019 while sales at Miss Selfridge dived by nearly a quarter.

Administrators say turnover for Topshop “reduced dramatically” after the high street lockdown to control the Covid-19 pandemic came into force in March 2020.

Arcadia agreed to defer contributions to its pension fund for six months from March to August last year. But it could not agree on a further deferral of the contributions, which amount to £25m a month. Attempts to raise £30m in cash to support the running of the business were also unsuccessful.