You don't need to be an 'investor' to invest in Singletrack: 6 days left: 95% of target - Find out more
so arcadia need £30m, but its parent company taveta investment [75% owned by his wife], can't fund this :0) and neither can they submit their accounts on time by the look of things..
cant wait to read about the massive pension black hole in the coming weeks.
Much as I like the idea of that weasel losing his shirt, we all know the the likely outcome is that his employees will get it in the neck and he'll swan off to Monaco to spend all that lovely tax-free loot his miussus has been keeping warm for him.
It's enough to make you go full Corbyn.
Isnt he a 'billionaire'?
Or is that just hot air, and he hasnt actually got a lot of spare cash hanging around, but loads of failing assets?
Or is that just hot air,
Smoke and mirrors.
No longer a billionaire, although just read one article his daughters worth £100m
like many business owners stripped out all value and left it to dwindle.
Now seeking banks/investors to fund.
Another 13k jobs on scrap heap,
the pension regulators have hopefully monitored his behaviour in Arcadia pensions, after copping him for £1/3b on BHS A few years ago
Perhaps Trump can lend him a billion or two?
His missus owns more than 92% of Taveta.
Has the company or either of the greens said they can't afford £30 million?
Could be any number of reasons for overdue accounts but in the context of current situation I would see that as a red flag.
Would share the view about possible pension scheme black hole.
Poor Phil's on the scrapheap again is he...?
I bet he walks away from any deal several Million quid richer, his staff owed months of back pay and/or robbed entirely of their pensions, and he'll be busy convincing his right wing friends it was all circumstance and none of it was his fault! 🤦🏻
I hope someone sinks his floating gin palace
They've always stripped the assets out of any business they've taken over, then 'leased' them back for a rental value each year, so when arcadia go to the wall don't expect there to be much assets, always amazes me that the government tend to turn a blind eye to this, knowing the outcome in most instances will always be the same, i.e. taxpayers picking up the bill and administrators making a packet out of the bones of the business.
It's times like this that I really wish there was a well deserved afterlife 🤔
Hopefully he'll slip up somewhere & leave himself exposed, might end up in jail with his mate Dominic Chappell, dodgy barsteward.
@argee yep that the tax system and private equity for you..
I worked for a major supermarket which owned the majority of its stores land and property in the mid 2000s, but that’s not tax efficient.
The aim was to rent and or pay interest on loans to reduce the tax bill.
It’s madness, Debenhams taken over by PE, asset stripped, it works while the economy is strong and revenue generation is consistently increasing .
Same with the Trafford centre owner £xxx m of debt,
Well at least the staff shouldnt be owed back pay, as they are all furloughed so government are paying for them
If anyone wants a nice, simple version of how he did it/got away with it then just go watch the film Greed. Don't pay too much for the privilege as it's not that good, but it weaves an interesting story and I bet it's pretty close to the truth.
Plus Isla Fisher.
Could we nationalise Topshop?
Perhaps Trump can lend him a billion or two?
Top Trumps?
His attitude to other people's money and livelihoods is much the same as his attitude to women employees. Bit of a pattern here. And he's short.
And he’s short.
And ugly. No amount of money can sort those two things. Good innit?
He may well end up back in charge, put Top Shop through a pre-pack and buy it back out of administration shorn of all it's debts and the less profitable stores. The rest of the portfolio will be picked over by JD Sports / Sports Direct who might take a few stores; the rest will close.
The writing has been on the wall for several years, CV-19 is just accelerating the process.
Pre-packs are just a means of shedding unprofitable sites, lining the pockets of administrators, but saving as many jobs as possible in the short term.
To be honest, if landlords get stiffed by these things, then tough shit. But for anyone who has a defined contribution pension scheme it just means less in the pot at the end.
It is another kicking of the can down the road.
Apparently there's a pension fund shortfall of £350m, with Green and his missus taking over a billion in dividends in 2010. Chances of him making good or just walking away?
There's no legal obligation to make up the shortfall, so it will be just down to his conscience / reputation. He was persuaded to make up BHS's shortfall, so maybe he will do so with Arcadia.
Borrows a billion to buy the group and take it private. Pays a billion in dividend to his wife. Arcadia have not paid a dividend since that payment. Looks pretty shady when put like that.
Borrows a billion to buy the group and take it private. Pays a billion in dividend to his wife. Arcadia have not paid a dividend since that payment. Looks pretty shady when put like that.
Text book Private Equity take over. The mistake he made was hanging onto it for so long having made zero attempt to invest in it or stay up to date. Sales have been falling for years. A more savvy PE owner would have floated it back to the market after taking the dividend and then let it's eventual collapse become someone else's problem.
Good article about him in the Sunday Times today, he's a proud luddite, won't use email, won't use a computer and doesn't have a smart phone. Refused to invest in an online presence, so has been completely outmanoeuvred by a younger smarter set of companies eg Asos, Boo-hoo etc.
FT had a nice graphic:
[url= https://live.staticflickr.com/65535/50661866631_f29f3e2ff5.jp g" target="_blank">https://live.staticflickr.com/65535/50661866631_f29f3e2ff5.jp g"/> [/img][/url][url= https://flic.kr/p/2kbPiVa ]UK clothing market[/url] by [url= https://www.flickr.com/photos/brf/ ]Ben Freeman[/url], on Flickr
I bet the first thing our govt will do once we've taken back control is to legislate against taking dividends from a company that has a pension deficit. I'm sure it's only been the EU that's held us back so far
I bet the first thing our govt will do once we’ve taken back control is to legislate against taking dividends from a company that has a pension deficit.
Only really solves a small part of the problem, as taking a massive dividend wasn't the root cause of the problem; at the time Arcadia was profitable and throwing off cash and possibly didn't have a pension deficit. It's the not investing in a business for 10 years and slowing running it down that caused the current crisis, by which time it's too late to do anything other than liquidate the remains.
A pension fund deficit is a creditor which has already effectively reduced the profits available for distribution - it is basic accountancy - likewise acquisition debt has to be serviced before dividends can be paid. As footflaps said, he could pay a dividend because the businesses were immensely profitable, but he lost a lot of his best people over time. (He got stuck with the BHS deficit because the Pension regulator went after him)
The writing has been on the wall for several years, CV-19 is just accelerating the process.
I think so, and the pandemic means this will be the in the headlines for a week at most before something distracts attention. More high Street shops written off as "part of the CV19 fallout".
Philip only has to weather a little bit of angst from former employees, and a few nasty headlines and then he can trouser some more millions... from his perspective it really is worth it.
For me it's really simple, can we rely on (all) people to do the right thing or do we need to legislate. That's it really. Expecting Green or anyone else to do spend their own money which legally haven't to is just plain daft. If the law enables him and others to act this way, then we've to accept that they will.
So two choices, suck it up or change the law.
I think there should be some regulation around dividends for companies with pension schemes. I know business success does ebb & flow & you can't necessarily say 'no dividends because you may go bust in 10 years due to unforeseen circumstances'. But something along the lines of any dividend payment must be matched with a contribution to the pension scheme would help prevent situations like this.
the trouble with these schemes is that a lot of the deficit is purely down to bond (etc) rates. Bond rates have plummited, which means that pensions schemes that were healthy now need a lot more money in them to be paying out the same amount to its employees.
really, there should be some way that the pension pot is invested in an annuity-like fund the moment its set aside (ie, this £1000 is for Bob to get £40/month from when he retires onwards). Not sure if that's possible, I suppose with defined benefit mostly closed now it'll be less of an issue in future
He got stuck with the BHS deficit because the Pension regulator went after him)
AIUI there wasn't a legal obligation for him to cough up, he mainly did it to preserve his reputation.
really, there should be some way that the pension pot is invested in an annuity-like fund the moment its set aside (ie, this £1000 is for Bob to get £40/month from when he retires onwards). Not sure if that’s possible, I suppose with defined benefit mostly closed now it’ll be less of an issue in future
That's what is happening to one of my old final salary pension, the fund collapsed into the pension protection fund and exited with various haircuts. It's now being wound up with reduced annuities / insurance policies being bought for all current / deferred members. Once they are all set up the pension fund will dissolve and cease to exist.
He actually paid the dividend in 2005 when the Pension Scheme was in surplus.
AIUI there wasn’t a legal obligation for him to cough up, he mainly did it to preserve his reputation.
As with any legal dispute there are different interpretations.
He got a right kicking on radio 2 I'm not normally a fan of the twerp that is jemery vine but it was good radio. Did green really turn a loan down from Mike(scummer) Ashley
Dunno about turning down loans but I expect it’s just all part of the power play of fat rich tossers.
Did green really turn a loan down from Mike(scummer) Ashley
Ashley's only offering it as a cheap publicity stunt, I doubt it had serious terms attached that would make any difference. E.g. it could have a stupid interest rate and require security on assets, so effectively turning a profit / giving leverage when Arcadia folds.
Looks like Arcadia has taken Denbenhams down now as well, dark day for the high street, going to be a lot of large empty units in the new year, and a lot of people out of work.
and a lot of people out of work.
Sunday Times has the tally at 235,000 retail workers so far this year!
I assume inc Debenhams and Arcadia..
Sunday Times has the tally at 235,000 retail workers so far this year!
is it not the case that COVID has just accelerated the inevitable? I cannot think of a single good reason why I would want to go into a department store, I can buy quicker, easier and cheaper online. I don't think I have bought any clothing in physical shop in the past 5 years. (tbf I hardly buy any clothing at all but I think you get my point)
is it not the case that COVID has just accelerated the inevitable?
Accelerated and over shot eg there was over capacity in the mid market dining sector, so many chains were going to have to scale back and some would fold, but CV has completely decimated them as they can't open.
Same in retail, those without a strong online presence have been holed below the water line. The odd exception, eg Primark, has deep enough pockets to wait it out, but many can't.
Will be interesting to see what bounces back in a year or so, these corrections always swing from one extreme to another....
Is that the same Sunday Times that does the Rich List? That'd make a great pull out supplement. The Rich List on one side and the ****ed by the Rich List on the other. OK yeah yeah I know it's not that simple, there's been a pandemic and that but it's evident that the inequality gap continues to grow for a whole range or reasons, some very 2020 and others a little more deeply entrenched.
@franksinatra middle aged blokes with no style are not traditionally who department stores have targeted 😉
iddle aged blokes with no style are not traditionally who department stores have targeted
Harsh, but true.
When we re-mortgaged a while ago the financial advisor dude had to go through the affordability calculator. This meant asking us about all of our outgoings. He asked be about spend on clothes and I said about £200*. He put this down monthly, I meant per year. We had a laugh about this then he pointed out that it isn't unusual to see people on very modest incomes spending £400 per month on clothes.
*£200 clothing spend doesn't include outdoor gear as this comes under hobbies, obviously!
*£200 clothing spend doesn’t include outdoor gear as this comes under hobbies, obviously!
Yes, barely get a Rapha bib short for that sort of money these days!
(tbf I hardly buy any clothing at all but I think you get my point)
Possibly, you're not their target market then.....
isn’t unusual to see people on very modest incomes spending £400 per month on clothes.
Given clothes are so cheap now, eg Primark etc, WTF would you do with them all? I feel bad if I don't get 10 years out of a T-shirt / pair of socks etc. Addmitedly some of my socks are just a collection of holes held together by a few threads.....
Given clothes are so cheap now, eg Primark etc, WTF would you do with them all? I feel bad if I don’t get 10 years out of a T-shirt / pair of socks etc
You know how boxers get more comfy the older they get? You know how you can wear them with holes in them until eventually you have to bin them because the threads that are left have taken to grabbing your bum hair or cheese wiring your tackle? Apparently that is not normal for other people. Who knew? Some people actually buy clothes more than once a year and even buy new stuff for specific occasions. I don't understand it.
Apparently there is also this thing called fashion and it means some people replace perfectly good clothing because it is not fashion. I don't understand that either.
When we re-mortgaged a while ago the financial advisor dude had to go through the affordability calculator. This meant asking us about all of our outgoings. He asked be about spend on clothes and I said about £200*. He put this down monthly, I meant per year. We had a laugh about this then he pointed out that it isn’t unusual to see people on very modest incomes spending £400 per month on clothes.
As a professional scruff I'd probably match your £200 a year. I'm forever being told my "new" t-shirts are 2 or 3 years old and threadbare.
My Wife however will spend £200+ a month on clothes, I didn't really mind, it's her money, but it was more than a bit of a compulsion. A typical day for her is 8 hours in Uniform, then home, shower and pyjamas for the rest of the evening. She always had one of those dodgy charity bags of clothes full at the back of the wardrobe, we gave away a sack of clothes every few weeks to make room for more.
@franksinatra . You understand that for other folk, shops in a high street that’s accessible is something that they need though, right?
I mean aside from not wanting to look like a homeless person (ahem) there are other equally important social reasons why having a lively centre of town with shops and meeting places is a lifeline for some folk
is it not the case that COVID has just accelerated the inevitable?
Yes, frankly for every good, solid business that folds in a recession, there's a dozen or more than were on a one-way road to collapse. In hindsight it can seem like a brush fire, taking out all the dead wood to allow new plants to get the light they need to grow. It doesn't make it any easier for the staff though, so you never want to seem to glib about it. Dixons, Woolworths, MFI, Maplin, Rover etc, you didn't have to spend too long in any of their outlets in their final years to know they were on their way out.
This is slightly different though, it's a whole sector. Here in Cardiff where we've built a huge shopping 'resort' people actually come here for the weekend, spend their days in the huge indoor shopping centres and the nights in the bars, it's a worrying time. It's been busy-ish the last few weeks (lock down over here of course) but nothing like normal pre-xmas traffic.
There's a lot of industries that are surviving at the moment, waiting to see if things return back to normal post-Covid, or the change is permanent.
In any normal year the retail industry would be taking on droves of seasonal workers now, not laying of 235k of them, but that's going to be a small figure if they can't start to roll out a vaccine soon, and very soon as in within the next week or two, because once the usual Jan sales are over, they'll be closing stores and laying off retail workers in their thousands.
. Here in Cardiff where we’ve built a huge shopping ‘resort’ people actually come here for the weekend, spend their days in the huge indoor shopping centres and the nights in the bars, it’s a worrying time.
People used to call those town or city centres, worrying times indeed.
I feel sorry for the workers but the out of town retail can **** off and die as far as I'm concerned. They're a cancer on our urban centres. Wonder how but that billion pound black hole Intu was staring into now is?
Amazingly enough, our local high street has two new shops, one opened today (it sells food, so allowed); the other, a florist, opens tomorrow.
Very brave fitting out a new store in lockdown number 2....
I cannot think of a single good reason why I would want to go into a department store, I can buy quicker, easier and cheaper online. I don’t think I have bought any clothing in physical shop in the past 5 years. (tbf I hardly buy any clothing at all but I think you get my point)
I can think of at least one very good reason for visiting an actual shop, if not a department store; fit. While I can easily get away with buying a lot of stuff online, because I like things loose fitting - I’m no muscle-bound Adonis with an eight-pack, there are some items like jeans where trying a pair on can save a lot of hassle and avoid having to return stuff. I fancied some Uniqlo selvedge Japanese denim jeans, and as I was planning a trip up to London, I went to one of their stores to try some on. Bloody glad I did, my usual 32” waist size wouldn’t get past the tops of my thighs! I tried 34”x34”, and they were perfect in waist and length, which has save a lot of messing around.
I found the same with shorts last summer, I wanted some skate-style cargo shorts, and found some in Route One in Bath that looked right size-wise, but were too small, while I’ve had others which measurement-wise should have been right and were too big.
I bought a Thrasher Skate Magazine hoodie from there as well, usually I buy XL, but they only had a Large, and I was surprised that it fit exactly how I wanted it to.
Shoes and boots are something else that should be tried on if possible.
The fall of top ship was inevitable imho, clothes that were equal in quality to primark but 4 times the price.
The timing of the liquidation is also interesting as the rules on creditors changed as of 1 December. The Good Law Project are watching to see who gets the benefit from Arcadia's fall with a view to crowd-funding legal action I would expect.
Ha ha. My wife showed me a facebook memory last night from 9 years ago, I looked down and had the same t-shirt on as I did in the photo.
As for Phylip green, I have no idea how it is legal to strip a company of it assets, give them to your wife and then rape the company until it collapses while your "wife" makes tens of millions tax free.
I do really feel for the staff who will lose jobs, especially at this time of year.
"As for Phylip green, I have no idea how it is legal to strip a company of it assets, give them to your wife and then rape the company until it collapses while your “wife” makes tens of millions tax free."
This is the big question, the debt that Phil loaded onto it made it a fait accompli. you can't grow a business and keep it healthy and relevant when it's spending all its profit servicing a debt. Hopefully the calls to strip him of his knighthood should force him to pay into the pension fund - and they should take it off him anyway
But look at the amount of space that the arcadia group takes up in the high street as well as the forcing Debenhams, the high streets are going to look very different, lets hope the property owners start to get real about the rent they can charge - also the govt needs to get real about how they fund councils rather than just relying on business rates (but this is the tories we are talking about so no chance of that...) so that new businesses can take up the high st space
As for Phylip green, I have no idea how it is legal to strip a company of it assets, give them to your wife and then rape the company until it collapses while your “wife” makes tens of millions tax free.
Perfectly legal, it's been the standard operating model of Private Equity for the last 20 years, eg Debenhams was screwed over exactly the same by PE. PG's mistake wasn't so much the massive dividend, it was failing to invest for the next 10 years and assuming that doing nothing would keep this stores competetive. Arcadia has been left behind by changing trends, online shopping etc; it's been marching towards obsolescence for some time now, CV-19 has just accelerated it's demise.
Amazingly enough, our local high street has two new shops, one opened today (it sells food, so allowed); the other, a florist, opens tomorrow.
Very brave fitting out a new store in lockdown number 2….
Florist? Brave, very brave..., supply chain anyone?
A few years back "a debenhams" was a massive draw to a town.
So much so that councils would give them free rent because they attracted footfall and meant they could rent the nearby units often part of a purpose built shopping centre.
Without the Debenhams, the house of cards collapses. Theres no one else to rent those massive stores, and councils will never fill them with smaller units..
there are other equally important social reasons why having a lively centre of town with shops and meeting places is a lifeline for some folk
@nickc I get what you're saying but the sooner we move to a society whose social support systems are intrinsic, not reliant on a proxy support network (of people sitting on benches in a dead town centre) the better. Community hubs and libraries are a better solution.
Perfectly legal, it’s been the standard operating model of Private Equity for the last 20 years, eg Debenhams was screwed over exactly the same by PE.
All stems from the abolition of the tax credit by Gordon Brown, made debt financing much more efficient than equity financing - we became like the US which also has a classical tax regime.
Also the fault of the markets for not seeing through the scam, you take a well capitalised business, sell off all it's assets and let them back on expensive long term contracts. Cut all investment to maximise short term cash flow and re-float the company back to the market.
What I don't get is that at the point of re-float no one should buy the shares as the company is holed below the waterline, but each re-float seems to go OK, thus perpetuating the whole process. Debenhams, AA, etc the list is endless and all pretty much the same.
Arcadia is the odd one out as PG didn't sell it on (which would have been the smart move), instead he just ran it into the ground by sticking his head in the sand and refusing to change anything.
Small local shops doing things that big shops cannot do will prosper. Here in Spain the small shops do well as they provide a service, so for e.g.
Butchers - make their own sausages, you choose the meat they mince it, advise on recipes etc. Price above the supermarkets but the quality far exceeds them.
Shops repairing things, alterations, sewing, shoe repairs, dry cleaning egg.
I avoid the chains where poss and just stay loyal to the same butcher, veg shop etc.
there's lots of reasons why small shops might be better off, lower overheads despite not having the economies of scale & the fact they (generally) don't load themselves to the hilt with debt to pay shareholder dividends all helps too! Locally, the town I live which has comparatively few chain stores is doing really well, very few empty shops whereas the nearby city is full of big, empty units (some standing empty for years!) in the "posh" end of town (the less affluent "quirky" end of town populated mainly with indy shops is actually doing ok still).Small local shops doing things that big shops cannot do will prosper.
Really like the idea though of encouraging town/city centres to be busy by providing community/meeting spaces etc rather than just shopping. In the aforementioned big city, one of the (pre-covid) big failed indy department store sites is earmarked for redevelopment including community space, covered market etc - although who knows if/when that will happen now. Would be great though if all these empty Debenhams were turned into similar - places where people could go & meet, small businesses & traders could set up shop cheaply, etc.
A few years back “a debenhams” was a massive draw to a town.
So much so that councils would give them free rent because they attracted footfall and meant they could rent the nearby units often part of a purpose built shopping centre.
Without the Debenhams, the house of cards collapses. Theres no one else to rent those massive stores, and councils will never fill them with smaller units..
Whilst I was reading about Debenhams demise on the BBC they were running a side-story about a firm in the US and Australia who were leasing City / Town Centre stores for peanuts and turning them into 'logistics centres' aka warehouses. To be clear this isn't some sorting centre where consumers can go and collect orders, but actual warehouses offering out-sourced logistics for business.
Crazy to think if that becomes a trend, retailers have been working for years to make their in-store storage smaller and smaller with better logistics to have more retail space and within a few years with more shopping then ever happening in out-of-town places and online, the formally prime city centre spaces are becoming the warehouses and the out-of-town places the shops.
You'd think it would be short-term and if the likes of shopping arcades and high streets become obsolete they'd demolish and hand over for residential, but the same trend is reducing demand for that too.
I know "we" as in STW have debated the end of the City as remote working and online shopping become more and more prevalent, but post-Covid is going to be an interesting time. Obvs there will be a few months of ecomomic shock and a longer period of low investment, but will we revert back to the way things were, or will we really spread out more evenly around the country?
Community hubs and libraries are a better solution.
It's a puzzling world where libraries are places that people go to fulfil their social needs, childcare, IT problems, but not to actually read a book.
It’s a puzzling world where libraries are places that people go to fulfil their social needs, childcare, IT problems, but not to actually read a book.
Not everyone would agree I know, but they're great these days, and surprisingly popular now.
Of course if you wanted somewhere (very) quiet to sit and read, they're not so good anymore.