Sir Philip Green considers selling Arcadia to Shandong Ruyi
Feb. 19, 2018
Sir Philip Green may be considering sale of all or part of his Arcadia Group, reports The Sunday Times. The report added that the Topshop-owner is believed to be negotiating with Chinese textile major Shandong Ruyi. However, according to The Daily Telegraph, Frank Field, the chairman of the influential work and pensions select committee, is urging the government to enable the pensions regulator to bring a stay on the sale to avoid repeat of the BHS-like scandal.
Meanwhile, Shandong Ruyi is strengthening its business interest in Europe with recent acquisition of majority shares in Swiss shoe-maker Bally. The company already owns controlling stake in the French luxury brands Sandro and Maje, the maker of Lycra and the British tailoring houses Aquascutum, Gieves & Hawkes and Kent & Curwen.
Arcadia brands Topshop, Miss Selfridge and Burton have been witnessing considerable decline in revenues in the recent times. The reports further states that the leaked set of Arcadia’s Christmas performance showed almost 10.9 percent fall in Topshop’s like-for-like sales and 6.5 percent drop in Arcadia’s like-for-like sales.
After Green sold BHS to bankrupt Dominic Chappell in 2015 leading to the collapse of the department store a year later with 571 million pounds (800 million dollars) hole in its pension funds, under pressure from the Pensions Regulator and MPs, who voted to confiscate his knighthood, Green had to shell out 363 million pounds (508.6 million dollars) to settle the matter.
Citing documents published by MPs last year, the report states that Arcadia’s pension deficit is at 565 million pounds (791.8 million dollars) on an ongoing basis, or around 1 billon pounds (1.4 billion dollars) on a buyout basis. Last year Arcadia said it would double pension fund contributions to 50 million pounds (70 million dollars) per year, which it expects to close the deficit in eight to nine years.
In 2012, US investor Leonard Green bought a 25 percent stake in Topshop in a 350 million pounds (490.5 million dollars) deal, which included terms that stopped selling or floating the company for five years by the parties involved. The term came to an end in December last year.