Sir Philip Green has insisted he did not block any bids to save collapsed department store chain BHS as it plunged into administration.
Arcadia tycoon Green passionately told a parliamentary inquiry into BHS’s demise that “there is no way in the world I’d have wanted this type of ending” after liquidators were called in to wind up the business two weeks ago.
Green, who sold BHS to Retail Acquisitions for £1 in March last year, had been accused by the consortium’s leader Dominic Chappell of blocking a late rescue attempt from Mike Ashley’s , just days before administrators were called in.
But Green told the joint Work and Pensions Committee and the Business, Innovation and Skills Committee hearing that he had supported Ashley’s attempts to save BHS – and even claimed to have offered to top up Ashley’s bid with £5m in additional funding from Arcadia.
Green told MPs he had spoken to Ashley “two or three times” during the weekend prior to BHS calling in administrators, after the Sports Direct owner told him his proposed rescue deal had “got stuck”.
Green claimed that administrator Duff & Phelps did not feel Ashley’s bid was sufficient and offered to add “a few millions pounds” to the offer to help save BHS.
After the bid failed, Green admitted that he even considered tabling an offer for the retailer himself because “it was so cheap”, but decided against it because of the “uproar” he believed it would have caused.
Green admitted he had sold BHS to “the wrong guy” in Chappell, but insisted he could have saved the business.
“Did we go out of our way intentionally to find somebody, anybody, in this case Chappell, to end up where we ended up?
“Three and a half hours in, whatever it is, I hope you can accept that is not the case,” he told MPs during today’s marathon six-hour parliamentary session.
“What has happened is beyond horrible, sad. We had zero intention of this happening,” Green added.
“Unfortunately, we found the wrong guy. A lot of people accepted this guy at face value.
“Would I do that deal again? No. Am I sorry we did it? Yes.”
Green labelled Chappell as “stubborn” for not launching a company voluntary arrangement (CVA) sooner – and claimed that had he done so in June, the retailer could have continued trading.
“If the business plan that had been laid down would have been followed, it would not have gone out of business. It would not have gone into liquidation,” Green maintained.
“I felt there was a plan in place that, if implemented, it would take a year to 18 months to get the business into shape.
“The saddest part of this is that when they did the CVA, 98% of all landlords said ‘yes’.
“If he’d have done that the previous June and taken £35m or £40m out of the rent bill – job done. He was stubborn.”
“There was no suggestion from anyone along the road that we should not do business with the guy”
Sir Philip Green, Arcadia
Green admitted that he had been aware of one of Chappell’s three bankruptcies when he sold him the business last year, but said the former racing driver had cleared a “sniff test” carried out by Goldman Sachs.
“We one million percent would not have done business with him, if they’d have said ‘don’t deal with this guy’, but that’s not the advice we got,” Green said.
“There was no suggestion from anyone along the road that we should not do business with the guy.”
Green also denied suggestions that he had personally called in the administrators, despite letters to MPs claiming otherwise.
The billionaire also denied that he caused BHS to slump into administration by calling in a £35m loan to the retailer from Arcadia.
Green said Chappell wanted him to waive the £35m charge to enable BHS to secure a £60m loan facility from Gordon Brothers.
However, Green rejected this, claiming the facility was a “loan to own”, which could have effectively placed Gordon Brothers in charge of BHS.
Green concluded the hearing by describing BHS’s demise as “a horrible ending” and reaffirming a commitment to give it his “best shot” to find a solution to the retailer’s £571m pension deficit.