Key investor turns his back on Sir Philip Green as the tycoon comes under fire over Arcadia pensions
Sir Philip Green has lost the backing of one of his biggest investors as he embarks on a major-cost cutting drive across his retail empire.
US private equity firm Leonard Green has ditched its 25 per cent stake in Topshop, seven years after it splashed out £350million on the investment, which valued the fashion chain at £2billion.
Leonard Green snapped up the stake as part of a deal to aid Topshop’s overseas expansion, which is now likely to be reversed.
Troubles: Sir Philip Green has lost the backing of one of his biggest investors – US private equity firm Leonard Green
The stake has been sold back to Arcadia for an undisclosed sum.
Green’s Arcadia group includes Topshop, Burton, Dorothy Perkins, Evans, Miss Selfridge and Wallis and has 570 stores, hundreds of concessions and 18,000 staff.
The sale of the Topshop stake came as Green faced a fresh attack from MP Frank Field, the chairman of the House of Commons pensions committee, over the £550million black hole in the Arcadia retirement fund.
Green, 67 is understood to be looking to cut annual payments into the fund from £50million to £25million. But Field accused him of being up to his ‘old tricks’ following the collapse of BHS with a £571million pension black hole.
It went under after Green sold it for £1 to Dominic Chappell.
Field said: ‘Sir Philip had proven himself no knight of British retail – quite the opposite. Does he really think he’s going to get away with his old tricks again?
‘Run the business down, pocket whatever cash is left, stiff the pensioners and sail off on the Lionheart [Green’s yacht] leaving employees, pension schemes and his long suffering creditors in the lurch? Not if we have anything to do with it.’
In an effort to get the business back on track, Green wants to shut stores and cut contributions to Arcadia’s pension scheme.
The Pension Regulator is currently in talks with trustees of Arcadia’s scheme.
Leonard Green confirmed it has sold its stake with its two directors Adam Levyn and Jonathan Sokoloff resigning from Arcadia’s board. It said it had the opportunity to repurchase its stake in the future.
It said: ‘The transfer simplifies the shareholding structure of Topshop/Topman Limited and enables the Arcadia board to focus on the restructuring options.’
Green is understood to be planning an insolvency procedure called a company voluntary agreement which will allow Arcadia to secure rent reductions and shut stores.
Once popular brands, Topshop and Miss Selfridge have been outflanked by internet-only firms such as Asos and Boohoo. Topshop and Topman racked up losses of £10.9million in the year to August 2017, down from profits of £59million a year earlier.