Morning Line: Who is Philip Green?

This is not a man who personifies the coalition government’s vision of Big Society. Sir Philip Green’s heart marches to an entrepreneurial beat, a single-minded money-making force fuelled by efficiency and thrusting aside all else, all the waste.  

The man who is praised with having become a billionaire faster than anyone else in Britain, and whose assets control some 12% of the clothing retail market, has been accused of being an asset-stripper, of taking excessive pay and of tax avoidance.

Criticism of his lavish lifestyle aside – in 2005 he paid himself £1.2 billion, the biggest paycheck in corporate history – the breadth of his experience can be questioned: How after all can a man who has built his fortune entirely through the retail market be responsible for spearheading an assault on public spending?

Of all the things written about Green, his successes (he bought BHS for £200 million and turned it into a business worth £1 billion) and his failures (several high profile unsuccessful bid for Marks & Spencer), the tale of how he made his first million gives the best insight into how his brain functions.

This breathless account was given to The Guardian several years ago:  

‘Guy comes to see me, Thursday morning. He's got an import business. Jeans. Gone broke, receivers in, dadadada. He's owed a million quid. Got about 400,000 pairs of jeans. Wants 935 grand. I called my bank, said it's got to be done tomorrow night. Next day they say OK. I say good, we've got to get to Bristol, pick you up at four. Chartered a helicopter. Off we go, banker, lawyer and me. Spend all night negotiating to buy this company. Five in the morning, one point one million, all done. Not allowed to start the helicopter up after that. Too noisy that time of the morning. Middle of nowhere, pitch black, police car comes by, gives us a lift to the train station, quick kip on a bench, caught the milk train back to London.

‘Monday morning we're up and running. We'd bought various people who owed money, so we go and see one of them. In Devon, it was. Said we'd like to collect our 250,000 quid. We had a little debate and he signed 10 postdated cheques. As we're leaving, he said, just en passant, he wished he could sell his business in three days flat. I didn't even know what he did. Found out, called him up next morning. Said was that a joke? Went to see him in Slough. Big building. He had 65 shops, concessions at Debenhams. He wanted four million quid. Have a look at his books. Didn't seem to add up right. Got my accountant to do a bit of a recce. Turned out he owed the bank three and a half million and his suppliers three and a half million. He's bankrupt. They're losing 70,000 a week. Can't pay the staff. Call him up on the Tuesday, say there's good news and there's bad news. The good news is I'll buy it. The bad news is you're broke. Said I'd take an option for 65,000 followed by another 435 if I get round the bend in six months. He said we're done.

"I went to see the bank, said the business is broke but I think I can fix it. I'll give you 100,000 as a gesture of goodwill towards your three and a half million if you freeze the debt for six months. Done. Then I had a look at the business. I could see what had happened. The usual. Same issues you see today. Bad buying, no discipline, no control, old stock, indecision, time-wasting, corporate thinking. I flew to Paris, shopped the shops, three suitcases of merchandise, went to Hong Kong, got it all copied, flew in, restocked the shops, got all the creditors reflowed, and got the business back to breaking even in four months.

‘Out of the sky the phone rings. These people want to buy me up. I said no, I just bought it. Don't want to sell. They went on. And on. I said all right, come and see me. Said look, I want 10 million for it. They said how d'you make that out? I said, well, basically I don't want to sell, so if you pay me what it's not worth I'll sell it. Now I've got a deadline with the bank for February 26 1985 and I end up selling the business on the 25th. For seven million. Went down to the bank in Curzon Street, said what do I owe you? They said dunno, er, 3 million 430 thousand pounds, I said right, there's your cheque. Slapped it down. Done.

‘So, ‘can be done is my motto!’

Green has since applied this logic to growing his businesses, relying heavily on a valuable contact book, but shunning the money-raising potential – and scrutiny – of equity markets as well as outside investors. Sweeping aside all that comes before him, Green is not a man compelled to explain his actions beyond the clear money-making agenda.

Green will not bring the Midas touch to the government review, nor will he bring sensitivity to an over-riding political agenda. Like the heads of the Office of Budget Responsibility and other outside teams brought on board to aid the cost-cutting agenda, Green also sets himself up as a willing fall-guy for a Tory government introducing difficult decisions to a financially squeezed electorate.

It is a role requiring an intractable, defiant and single-minded thinker. Sir Philip Green is the perfect choice.