The sharks go shopping…

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THE demise of BHS will not trouble the fashion-conscious or those who like to ride the trends. But it should worry anyone alarmed by the rapacious ways of modern capitalism.

If we might for a moment shuffle two stereotypes into the same paragraph, old-style capitalism was stern but paternalistic, firm but fair; and new style-capitalism is the old boy’s flashy, immoral wide-boy cousin, in the game for what can be pocketed and having little or no care for the workers they employ or the institutions they briefly own while laughing all the way to the bank; and in Sir Philip Green’s case, all the way to another new yacht (that’ll be £100m, sir).

The collapse of BHS as a store is upsetting for that dwindling band of shoppers who still patronise the place; and also for the 11,000 workers – doubly so as the company’s pensions fund has been left with a huge deficit.

It is not often that the Guardian and the Daily Mail are in accord, but this morning the two papers take a similar line on BHS, previously owned by billionaire tycoon Sir Philip Green, who 13 months ago sold the company for £1 to Retail Acquisitions, owned by former racing driver Dominic Chappell, a man twice declared bankrupt.

The Guardian’s take on the story is: “Revealed: the £25m payout to BHS bosses”, while the Mail picks something from the gaudier end of the headline rail: “SHARKS WHO BLED BHS DRY.”

Usually I am very much more of a Guardian man, but the Mail nails this one, accusing “City fat cats” of “carving fortunes out of failed retailer BHS while leaving its workers in the lurch”.

The ownership of this 88-year-old company is a lot more colourful than any of the fashions they stock. And if nothing illegal has occurred here, a high degree of moral shabbiness has been involved.

It is not especially surprising or even shocking that a retail institution can eventually collapse; nothing lasts for ever, tastes change, shopping habits flow elsewhere – all that and more. What is shocking about BHS is the way the ailing company seems to have been taken on as little more than a cash-cow.

First up Sir Philip Green buys the company and owns it for 15 years, during which time he and his family are reported to have collected £586m in dividends, rental payments and interest on loans. And now the company has imploded leaving a pension deficit of £571m. You do not need a calculator to spot the similarity between those two figures.

There are high-street shops where you can buy anything for a pound. Dominic Chappell’s consortium bought a whole retail chain for a pound. Now this sort of deal happens, and sometimes it is the only way to ‘save’ a company. Yet little over a year later, nothing has been saved – and during its very brief ownership of an ailing company, Retail Acquisitions is said to have been paid £25m.

That’s not a bad bargain: buy something for a quid and then get 25 million back in return.

All this apparent dodgy dealing stirred up scorn from both sides of the House of Commons. Shadow business secretary Angela Eagle said of Green’s conduct: “In this situation is appears this owner extracted hundreds of millions of pounds form the business and walked away to his favourite tax haven”, while Tory MP Richard Fuller said that leaving the state-funded Pension Protection Fund to fill the pensions gap was the “unacceptable face of capitalism” and that Green faced “reputational questions”.

Not sure about that last part: Sir Philip Green is probably very pleased with his reputation as an obscenely rich man who sails his yachts in a sea of money.

As for the man who led the £1 buy-out, Chappell is said to have paid himself a salary of almost £540,000 while, according to the Guardian, “reportedly buying a new yacht and loaning his father £1.3m to pay off the mortgage on a home”.

All reports of this affair are at pains to point out that nothing illegal has taken place. That’s true, but perhaps the law needs to change so that these people can no longer bleed companies dry and wander off to buy new yachts with their ill-gotten gains.

And what exactly was Sir Philip Green knighted for? He should hand back the knighthood – or sell it to someone for one pound. And if he had a moral or two about his person, he could change his mind about taking delivery of that new £100m yacht and instead put the money in the BHS pension fund.

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