The friends of Philip

Philip Green 1

by
Last Updated: 31 Aug 2010

If money was the sole criterion for entry, Philip Green's place in a business hall of fame would have been secured some time ago. But try as he might, Green, 52, can't shake off his bad-boy image. He's still viewed with suspicion in the City, still not taken seriously, still not given the credit he deserves for transforming the fortunes of Arcadia and BHS, and his own wealth in the process. Partly, it's noxious snobbery. Green didn't go to university, never earned his spurs working his way up the corporate ladder. Partly, it's Green's style. He's rough and tough, a loud North Londoner (now a tax exile) who speaks his mind and may have second thoughts later. He swears a lot and shouts, and doesn't care for committees and time-servers. He's all action, all aggression and, although it can be hard for more conservative types to stomach, there's no doubting he gets results. In US-speak, he's a 'rainmaker' who has gathered around him a handful of other entrepreneurs, dealmakers and financiers. They get rich, he gets richer. Now worth at least £2 billion, he lives in Monaco with his wife Tina, and when in London during the week, stays in a hotel. He started in business 30 years ago with a £20,000 bank loan and later tried to buy Marks & Spencer with a bank credit line of £7 billion. He has all the trappings of wealth: a yacht, a plane, even a crocodile-skin and diamond Monopoly board. He's not to everyone's taste, but such things are unlikely to concern Green and his fellow Rat Pack members.

Terry Green 2

Ever since Terry Green led Debenhams in its demerger from Burton, he was marked down as one to watch. Once tipped to run Marks & Spencer, in 2000 he teamed up with Philip Green, his namesake, only to leave two years later. Not that the two fell out; it was more, say friends, a matter of Terry getting frustrated at Philip's refusal to float BHS (which would have netted Terry about £20 million) and Terry seeing what could be achieved by buying troubled retailers and turning them round. He left with a £1.8 million pay-off and an agreement not to compete with BHS. He became involved in negotiations to ride to the rescue of Mothercare, but when talks collapsed he turned his sights on Allders, the Croydon-based department store chain.

He joined with property group Minerva to form a bidding vehicle, called Scarlett Retail (his toddler daughter is named Scarlett). His £132 million offer was successful and Scarlett Retail paid £500,000 to Philip to release him from the no-compete clause. If Terry can work his magic at Allders, he stands to make more than £20 million. For a period, it looked as though Green would be linking up with another Rat Pack member, Tom Hunter. While Green was stalking Allders, Hunter was building up a stake in House of Fraser. The negotiations broke down, but there is still speculation that Allders and House of Fraser will one day merge.

Stuart Rose 3

Stuart Rose made £25 million when he oversaw the sale of Arcadia to Philip Green. It's not the only time he's had a pay-off. He collected £540,000 for three months' work after Argos, where he was chief executive, was taken over by GUS, and then £2.2 million when his next employer, Booker, was bought by Iceland. A former M&S trainee, Rose went on to put together a bid for Debenhams last year. Since that failed, he has been looking to make a retailing comeback and his name is regularly pencilled in next to possible upcoming high street deals. Dapper and immaculately turned out, Rose is the most suave of the Rat Pack. But appearances are deceptive; he's as steely as the rest of them, including Philip Green, whom he counts as a close friend (Rose was a guest at Green's £5 million toga party). Rose lives in London and Suffolk, and, like fellow Rat Packers, has assembled 'thousands' of bottles of fine wine and flies his own plane.

Tom Hunter 12

If there is a member of the Rat Pack most likely to, it is Tom Hunter.

He makes no secret of his ambition. His story is the stuff of legend, from peddling shoes from the back of a lorry in his native Scotland to growing a chain of stores and selling them for £260 million. He is close to Green and is quick to pay tribute to him: 'We have been very lucky together and I have learnt a huge amount from Philip.' As well he might, having received dividends of more than £20 million from Green's BHS.

But he also knows how to make money without Green, having made £8 million on his Selfridges shares, and he owns the Office shoe shops and Birthdays cards chains. Losing out on possible bids for the department store groups Selfridges, Allders and House of Fraser hasn't dented his appetite. He has built up what he describes as a network of 'strategic partners' who each bring different skills to the party. There's Green, the Reuben brothers from property and Peter Cummings, the banker from HBOS, who is on record as describing Hunter as a serial entrepreneur. An icon in Scotland, Hunter is a substantial philanthropist. He's young (42), fond of casual clothes, with a penchant for shaving his head and keeping his beard to a designer stubble length. In what spare time he has, he plays the drums in a charity rock band. He wants to own department stores. He may get his wish. But the staff should look out: Young Mr Grace he is not.

Allan Leighton 13

It's difficult to recall now, but less than four years ago Allan Leighton was an obscure figure, known to business for running Asda but unknown elsewhere. Now he's everywhere, chairing the Royal Mail, chairing BHS (for his friend Philip Green) and lastminute.com, deputy chairman of Selfridges, on the boards of BSkyB, Dyson and Cannons health clubs. But for all his posts, he's very much an outsider, cultivating an image of the tough-guy corporate crusader with the common touch (fit and lean with a shaved head, he does not look like the Harvard Business School graduate he is). Even Green has admitted to having difficulty in keeping up with Leighton, such is his pace and the volume of ideas that spring from him. He talks directly and to the point, fast and furious. He can't do with layers of management, preferring to talk to the shopfloor workers. He made an estimated £80 million from the sale of Asda to Wal-Mart. He pays tribute to his friend - 'Philip Green says the harder he works, the luckier he gets' - but also lays down his own watch-words: 'No risk, no reward. No dream, no future.' There is no danger of him slowing down.

The associates

The Rat Pack have gathered around them a charmed circle of bankers and property wheeler-dealers. Alongside Ian Grabiner 4, the CEO of Philip Green's Arcadia, is favoured banker Peter Cummings 7 of HBOS, source of the debt for Philip Green's bids for Arcadia and BHS. Another is Chris Coles 9 of Barclays Capital. But the financier who has made her name from her dealings with them, and watched her career follow a similar upward path, is Robin Saunders 5. An American and a former head of WestLB's principal finance unit, Saunders doesn't fit the traditional City powerhouse mould.

But by dint of sheer personality and charm, the working of contacts, an ability to think laterally - and, it must be said, good fortune - Saunders has projected herself to the top. It was she who helped her friend (and Green's) Bernie Ecclestone, when a bond issue for his Formula 1 empire looked like flopping. Morgan Stanley couldn't get the issue away, but Saunders at WestLB did. In property, the wealthy Tchenguiz brothers, Robert 8 and Vincent 11, and Reuben brothers, David 6 and Simon 10, appear to be among the first to receive calls about a Rat Pack opportunity.

Find this article useful?

Get more great articles like this in your inbox every lunchtime