The mt Interview - Philip Green

Ranked fifth in the Sunday Times Rich List with a fortune of £4.85bn, the proprietor of Bhs can't stop chasing the money.

by Chris Blackhurst
Last Updated: 31 Aug 2010

It could be the beginning of a nursery rhyme. Philip Green is in his counting house, counting out his money. For that's how it feels, sitting with the multi-billionaire retailer (not a phrase I'm required to write very often) in his office in Bhs's headquarters at London's Marylebone Road.

Green's on top of the world. It's towards the end of the day, but the place is a hive of activity, with most of the buzz coming from Green himself.

The mobile phone rings. He doesn't tell the caller he'll ring back. He takes the call and talks animatedly about some deal or other. His PAs come in and out with messages. They don't speak, but put scribbled notes in front of him. He glances at them and barks instructions immediately.

A senior executive wanders in and for five minutes they speak figures.

He taps a Philip Morris cigarette, lights it, leans back in his chair, gets up, paces round the room and flops down again. Permanently tanned from the sun in Monaco, where he lives, thick-set and with slicked-back, crinkly grey hair, he could be a boxing promoter or a bouncer on a nightclub door. He is wearing a huge watch. He's not a big man, but he's not somebody with whom you would want to mess. His chest is thrust out, his gaze is rock-steady. Make no mistake - if you want a fight, he will give you one.

The office has been decorated by someone with an eye for antiques - his wife Tina, it turns out - but has since reverted to a more functional space. The result is a mishmash of expensive items interspersed with memorabilia and things to do with work. On one wall, there's a framed press cutting, referring to his purchase of Arcadia (the Top Shop, Dorothy Perkins, Miss Selfridge, Top Man, Burton, Evans and Wallis group he owns, along with Bhs). It has been signed by members of his staff. There's a programme for the 1962 Cup Final, featuring his favourite team, Tottenham Hotspur.

Clothes and other goods destined for his stores lie around. In one corner is a pile of red and white teddy bears. He sees me looking at them. He grabs one. 'I've just bought these. We'll do 240,000 of 'em in Bhs at Christmas. Last year, we had ones with Santa hats on - we did 235,000 and we were sold out by December. That's £3 million of sales.'

There is no computer, not even a laptop (he doesn't use them), no workbooks, no papers. There is an antique desk, but it's covered in pictures and knick-knacks, and clearly isn't used. His desk is a large modern glass table. All he requires is his mobile phone and a cigarette lighter.

He's about to go on holiday, he declares. Finding it hard to imagine him not doing very much, I ask what that means. Will he really leave work behind? Ask a silly question.

'I'll make about an hour's worth of calls a day and I'll stay in touch.' (Later, when he's away, my phone rings. It's Green, wanting a chat. In the course of the conversation, he rattles off some up-to-the-minute trading figures. I remind him he's supposed to be on holiday. He laughs.)

This is the thing. He's worth billions of pounds, yet he never stops.

Other billionaires have offices that are palatial, that drip with gold and marble and have carpets you could sink in. Green's could be the cluttered back office of any shopkeeper anywhere.

He's 53 and has got so much money he'll never be able to spend it all - and still he wants more. Why? It's not the size of the pile of cash that drives him, surely - after a while, the noughts start to become meaningless.

Rather, it's the making of it. He can't help himself. He knows no other way. He doesn't even want to know another way. It's an addiction: sniffing a bargain; negotiating; closing the sale; above all, constantly trading.

He's forever wound up, taut like a spring. He wouldn't dream of letting go on the golf course or curling up with a good book. His idea of relaxation is to play the tables at the casino, to carry on chasing the money. Meals with him are hurried affairs. The food is an inconvenience; he hardly seems to taste it. He hasn't got time to savour it - he wants to get on with the chat about the industry, who is up, down, in, out, how badly they're doing, how well he's doing.

For someone who has made so much and done so well, Green is in constant need of appreciation and approval. The public image is of a brash, aggressive, swaggering pit-bull of a man, but he is more complicated than that. He's also edgy, brooding, nervous, anxious to know what people think of him.

At a recent business awards dinner he gave a rare speech, outlining his tips for getting to the top. He had a few headings scribbled on a piece of paper, but mostly he spoke off the cuff. It was a brilliant performance that had the audience on its feet, upstaging both the Chancellor of the Exchequer and Sir Digby Jones, who also spoke. Afterwards, despite the ringing applause, he sought reassurance that his talk had been okay.

What he was actually seeking, though, wasn't the plaudits from the hundreds of diners but the congratulations of those at the top table - his retailing peers and other business leaders. He has a love-hate relationship with the Establishment, the City and sections of the media, railing against them, often with torrents of abuse. He casts himself on the outside, but wants the acclaim and the understanding of the insiders.

That he has achieved so much he puts down to instinct and an ability to remain focused. His address that evening, for instance, said much about his method and style. He offered a 22-point guide to successful management that put the stress on humility and simplicity - learn from people, don't complicate things, have the respect and trust of staff - and practical common sense: employ staff with specialist knowledge, understand leverage and gearing, and 'no deal is worth going bankrupt for'.

He pointed out the important difference between deciding not to win and losing (hence his decision not to buy Marks & Spencer for £12 billion). 'You can buy anything in the world if you overpay,' was how he put it.

These weren't throwaway remarks. These are principles that he holds dear.

It's noticeable, for example, that as they leave for the day, his two secretaries come into his office to wish him a good holiday. Their affection seems genuine. He cautions to treat people well and he does.

So, where has it come from, this philosophy? From experience - he's been in retailing since he was 16 and started selling shoes to shops. From the two key influences in his life: Alma, his mother (his father died when he was 12), and Tina, his wife, to whom he defers constantly. She remains in the background, in Monaco with his two children, Chloe and Brandon, but there's no doubt that she carries enormous authority.

Primarily, however, it comes from the gut. There's no more animal, instinctive entrepreneur than Green. His capacity to keep figures in his head and his dexterity with mental arithmetic are extraordinary. He hunts opportunities, stalks them. He backs his opponents into corners until they succumb.

If it seems that he was born to do this, well, in a sense, he was. His father, Simon, was a property developer turned electrical retailer and garage operator from the East End of London. The Greens lived in Croydon and ate, drank and slept business. Only later did they move to north London, where Green was able to conform to the stereotype of the Jewish north London wheeler-dealer.

Despite his penchant for swearing and his Cockney geezer manner, Green went, aged eight, to Carmel College, the smart independent Jewish boarding school beside the Thames in Berkshire. He didn't excel academically, but was a combative sportsman, captaining the school cricket and football teams and playing cricket for the county. The death of his father from a heart attack left Green the only male in the family (he has an older sister, Elizabeth). His mother inherited what would be £180,000 in today's money and took over the running of the family business.

She branched out into automatic laundrette machines and self-service petrol stations, just arriving in the UK from America at the time. Her son helped her - and took his duties seriously. 'Having no father, my natural instinct was to pay a bit more attention.'

He worked on the forecourts, cleaning windscreens and changing oil. He learned the value of money, how if he did a good job he might get a larger tip than if he didn't. It was a lesson that stuck. He wasn't interested in university - and, besides, this was in the days when there wasn't the push for higher education that exists now. Instead, he determined that as soon as he was old enough, he too would set up in business. He quit school and went into shoe retailing, learning everything from sourcing and buying to selling. He did it for five years - this introduction to fashion retailing was his equivalent of higher education - before going it alone.

He went to Hong Kong to find out about the rag trade, about the factories that work at breakneck speed producing garments in high volumes at low prices. During the next decade, Green tried his hand at many ideas and projects, none of which really took off. He went into designer clothes, even forming a company with Joan Collins to market her jeans.

At 33 he struck gold, selling the Jean Jeanie chain for £3 million, having paid a mere £65,000 for it a year previously. He was on his way. That success was followed by greater things at Amber Day, but when the group failed to meet its profits forecasts the City demanded Green's head. He left in 1992 with £1.1 million in compensation, but it was an episode he will never forget. He still harbours a grudge and it sealed his disdain for managing public companies and having to obey shareholders' wishes.

Neither has it vanished from City minds. Just as Green said he would never work with the City again, there are those in the Square Mile for whom the sentiment is mutual. But Green had the last laugh. One of the shocks of his aborted tilt at M&S in 1999 was that this supposed pariah was able to draw on letters of funding from some of the most powerful financial institutions in the world. It was they who stood to benefit from his bravura approach to business - not those who sniffily recalled incidents long in the past.

After Amber Day, he bought the What Everyone Wants chain of discount department stores in Scotland. His major break, though, came with his bid for Sears in 1999. He was backed by private money from the Barclay brothers and the deal propelled him into the major league, netting him £150 million in six months. Now he could pick and choose.

Given the sorry state of the British high street, he was spoilt for choice.

But in the end, his sights settled on M&S, perhaps the biggest of the wounded beasts in the retail jungle. He was rebuffed. He tried again last year, didn't get the affirmation he wanted, so withdrew. Will he try again? His eyes twinkle. It's a question he's been asked countless times and answering it is a game he loves to play.

He could do it tomorrow, just like that. To prove his point, he reaches for his briefcase and pulls out the last bid documents with the pledges of support from the banks.

'Took me just two hours to get them,' he says, leafing though them. 'Look at 'em, 10 billion quid.' So will he have another go? He laughs.

I think he will, because he's not the sort to walk away. But they must come to him, on bended knee, begging him to make an offer.

But I could be wrong. He gives every indication of having more than enough to keep him busy at present. He has just bought the Etam chain, and there are other groups that could come his way. Plus, he also has Arcadia and Bhs - both acquired after that first crack at M&S - to occupy him. The high street, he shrugs, isn't having a great time.

'Suddenly, it's all changed from people borrowing to get on, house prices rising rapidly and people wanting a better home and a better car to the cost of money going up, houses flattening out and people feeling over-borrowed.' He puffs on his cigarette (he remains a heavy smoker despite undergoing heart bypass surgery in the mid-90s. 'This back period to Christmas will be quite tough on the whole marketplace.'

Some retailers will feel it worse than others. A few are already in distress: French Connection has experienced a 70% drop in half-year profits; London after the bombings has been hit by an 11.5% year-on-year fall in sales, according to the London Retail Consortium. Green must also be taking a hit, but he doesn't have to show us the figures. 'The British consumer is the most aware, most savvy shopper there is,' he smiles.

The implication is clear: the better-run, value-for-money, fleeter-footed outfits like his will be all right. Others won't be. His eyes sparkle again. We both know who he means.

Don't get him wrong, though. 'Our sector has had a soft year because people were over-borrowed and then we had an early Easter. It was a poor spring for weather.' He can sense my incredulity.

'Journalists don't like accepting the weather as a reason, but people should understand what a massive factor it is. We can be down 10, 15, 20% day-on-day, week-on-week, just because of the weather.'

The big shift he has noticed is that 'people who buy on price have got more choice than they've ever had'. Bhs, M&S - they're the same. 'They've got customers who want to be more fashionable. They don't want bog-standard products any more. People want to be inspired. That means we've got to work harder to deliver the proposition they want.'

In the last 10 years, he says, the whole landscape of retail has changed dramatically. 'There's masses more development and more different types of shopping. Look at Bhs. For years, it got by on having a great lighting department. Still has, but that was when there was no B&Q, no others.

Now there are, so we've got to be better, we've got to have a most-wanted product.'

Added to that, he says, the cost of doing business has shot up. 'Rates have gone up, electricity is up 50% due to the oil price. That means all your consumables, carrier bags ... they've all gone up. Then there's the minimum wage. It's been a huge inflationary marketplace.'

Goods around the world, however, have never been cheaper or more plentiful.

'There's plenty of production, plenty of supply. And everything is so much faster. It's more aggressive now. Everybody has got sharper and got better pricing. Products are cheaper - take £3 jeans - everybody is more competitive.'

Phew. If he'd bought M&S, he says, 'life would have been very tough.

It must be torture doing what they're doing, working 18 hours a day, trying to re-educate the workforce. I can go to bed at night and sleep.' His eyes are a giveaway - they're laughing. He delights in every twist of the knife into M&S.

Is he not worried by the advent of Primark, sweeping everything before it in discount fashion? 'C&A was here for 80 years, it closed down. Littlewoods has disappeared. It's a competitive marketplace. But there's also room for everybody. The theory that says I should be worried about Primark says you only need one shop. Go on, stop 100 women in the street at random.

Show them a product. Some will like it. Others will say they won't be seen dead in it, not in this shape, in this mix, this colour. That's why we will always have different brands.'

He's in no hurry to expand overseas. 'We will do north of 180 to 190 million transactions in all our stores this year and we've still not touched most people in the UK. All our energy and expertise is here. At some point we may have to look overseas, but we're not there yet.'

He's wary, too, of over-paying. 'I've been pushing to create a seat at the table. First with Sears - that gave me scale; then Bhs and Arcadia.

I nearly made it with M&S, which I should have got. But now people are saying: you've got to pay more. If PG can pay eight, we can make him pay nine.' He returns to M&S time and again.

'That was the biggest disappointment of the whole thing,' he says. He even went out of his way, he maintains, to placate those who suspected he was getting the company cheap and would make a lot of money quickly (as he did with Arcadia and Bhs), by offering them more than a third of the equity. 'I thought, if they think I've got a magic wand, they can keep 35% of the magic ...'

His voice tails off. For all the glee at M&S's troubles since, not getting it cuts deep. The justification for not raising his putative offer pours out. 'I'm risk-averse. The fundamentals have got to stack up. I got more Brownie points from going home at £4 (the price he was prepared to offer for an M&S share) and having restraint. It's never what are we going to make, but what we are going to lose if we're wrong.'

He's older now - 'I'm 53, not 43. I want comfort in my world. So are we going to bet the ranch? What for?'

There will be other deals, he says - you can bet on it. He's capable of playing a long game. 'If the fundamentals are correct, we will do them.

On Sears, I did my homework in 1990. I bought it in 1999 with the Barclays. I worked on it for nine years. Who knows what may happen?'

Success, he claims, hasn't changed him. 'I'm exactly the same as I ever was. I'm still as passionate about the ranges, the shop fits and the reviews as ever. I've seen every single item that goes on sale in our stores. I run the most profitable private clothing businesses in the world.

You've got that at one end and this teddy bear at the other. The net, net, net is you've got to love it or why do it?'

He sticks out his jaw and fixes his stare. 'I am 100% focused on what I'm doing. That's the key. You've got to know what you're doing, got to know your endgame, know your goal. And you've got to be reliable. Take 50 people at random through the whole business network. Ask: if PG says it's done, is it done? You will get 50 yeses. That's what I mean by being reliable.'

The people for the next meeting have arrived. They're here to show him a new range. His first meeting was at 8am; his last will be at 7pm. Then he can relax on holiday. 'You know, I'm a businessman who happens to sell clothes as opposed to a rag trader who wants to be a businessman,' he says. His eyes are shining again.

THREE CHALLENGES FACING GREEN

1. To continue to grow Bhs and Arcadia in the face of ferocious competition from retail rivals and a downturn on the high street

2. To put himself in an unassailable position so that if Marks & Spencer were to become available he could buy it, at the third time of asking

3. To plan his succession - who will become king next?

GREEN IN A MINUTE

1952: Born 15 March in Croydon. Educated Carmel College

1968: Starts first job as trainee shoe importer

1973: Sets up on his own

1985: Makes first million from selling the Jean Jeanie chain

1992: Forced out of Amber Day by shareholders after missing profits forecast

1999: Launches bid for Sears. Fails in first attempt to buy Marks amp; Spencer

2000: Buys Bhs

2002: Acquires Arcadia Group

2004: Prepares second bid for Mamp;S, but pulls out when his putative offer price is rejected

2005: Buys Etam

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