Sir Philip Green is on the defensive after a damning investigation by MPs into his sale of BHS and its subsequent demise dubbed him the “unacceptable face of capitalism". While the damage done to his reputation is not likely to fade fast, the impact it has on the Arcadia Group brands – such as Topshop and Miss Selfridge – will be minimal (if anything at all).
The billionaire’s public dressing down came on Monday (25 July) after MPs on the work and pensions select committee and the business, innovation and skills (BIS) committee released their report into the failures of BHS.
As Green holidayed on his £100m superyacht, MPs pulled no punches.
Blame was placed squarely at his feet after he sold the ailing retailer for £1 to twice-bankrupt former racing driver Dominic Chappell, a move which saw it enter into administration just 13 months later, leaving a £571m pensions deficit and resulting in the loss of some 11,000 jobs.
Green was “the Napoleon figure” who ultimately sealed the retailer’s fate.
He “systematically extracted hundreds of millions of pounds from BHS, paying very little tax and fantastically enriching himself and his family, leaving the company and its pension fund weakened to the point of the inevitable collapse of both,” MPs said.
They also found “little to support the reputation for retail business acumen for which he received his knighthood” leading to calls for him to be stripped of the title.
If he wants to stand any chance of remaining ‘Sir Philip’ then he must stump up the pension shortfall. “And if he says he can’t afford it then he should sell up his extra yacht,” said Labour shadow chancellor, John McDonnell.
Brand perception perseveres
Despite the problems that have engulfed BHS and the subsequent fallout that has ensnared Green, brand perception of other Arcadia brands has remained resolute.
According to YouGov Brand Index data – a combination of several metrics including Impression, Value, Quality, Recommend, Satisfaction and Reputation – the health of its most popular division, Topshop, has never been stronger.
Its ‘Purchase Consideration’ score among females aged 18-34 paints a clear picture, having very recently reached its highest level in 2016. In other words, it continues to be the go-to retailer for its target demographic.
Sarah Murphy, director of YouGov BrandIndex, explained: “This is of course particularly true for younger customers of Topshop and Topman. For this group, brand loyalty plays a significant part, while the travails of Green are a distant concern. Certainly, consumers in this group have been able to disassociate the scandal from a store they like – if they are aware of the story at all.”
Indeed, as the recent brand controversy surrounding Volkswagen’s emissions scandal and TalkTalk’s massive data breach show – unless a scandal directly affects an individual (be it having to return a car or worrying about bank details being stolen), then company misdemeanours are unlikely to affect the bottom line.
So, whilst his personal reputation as the ‘King of Retail’ might be irrecoverably damaged, his high street presence is likely to escape this crisis relatively unscathed.
“It is questionable whether the brands ultimately owned by Green will see an immediate drop-off in revenues as a result of his personal troubles,” explained Ed Coke, director of consulting services at research and advisory firm, Reputation Institute.
“[Our] data shows that perceptions of products and services have the greatest influence on the reputations of UK high street retailers. If the in-store experience, customer service or perceived value equation was below expectations in brands like Topshop or Miss Selfridge, we would expect to see greater reputational damage than the moral judgements consumers may be making in light of the Select Committee’s report.”
It remains to be seen if these predictions for the fate of his Arcadia brands hold true as the controversy looks set to rumble on.
Despite repeated promises to sort out the pensions deficit at BHS, a plan of action has yet to manifest. Meanwhile, Green is threatening to sue the chairman of the pension select committee, Frank Field, over his comparison of him to disgraced media mogul Robert Maxwell, who stole millions for the Mirror Group's pension scheme.