A paler shade of Green

Same surname, same ambition, but Terry falls way short of his mentor Philip.

by Patience Wheatcroft
Last Updated: 31 Aug 2010

Do you sincerely want to be rich? Such a question wouldn't have caused Terry Green a moment of doubt. That he wanted to emulate the financial success of his chum and former employer, Philip Green, was something of which he made no secret as he hunted the high street for potential opportunities to make himself a retail millionaire.

But the wish alone is not enough. Terry Green's brief and hopeless reign at Allders has provided ample demonstration to others - though probably not to himself - that however much he would like to make a fortune, he lacks the entrepreneurial zeal that might help him achieve it. Wanting to be rich is not the same as wanting to build a business, let alone being able to accomplish that.

Green alighted on Allders not because he had an exciting, imaginative idea for how the ailing business could be revived, but because it was there. Now it is defunct and thousands of staff and pensioners must endure potentially years of uncertainty before they learn the implications for them of its collapse.

The fate of Allders is a messy and unedifying saga that has tainted several business reputations. Under the umbrella of United Drapery Stores, it was once part of Britain's biggest retail business. In the mid-1980s, Hanson bought the Allders stores, along with a thriving duty-free airport retailing division. Before the end of that decade, Hanson apprentice Harvey Lipsith had bought out the business, helped by loans from the vendor that, so dire was trading, eventually had to be written off. But by 1993, Allders was smart enough to be floated, albeit with a price tag about £50 million below that which the management buy-out team had paid.

Lipsith appeared to share Green's motivation: money. That, at least, was what some irate investors must have concluded when, following the sale of the duty-free business in 1996, he collected a £500,000 bonus for 'maximising value on the sale'. This was before UK remuneration packages regularly reached seven figures, and so caused quite a stir. It left one wondering whether the chief executive might have offloaded the duty-free business at a giveaway price had the bonus not been on offer, which would not have been a career-enhancing move.

Lipsith was a deal-doer, not a retailer. He bought some department stores from Philip Green, although if the billionaire owner of Arcadia and Bhs decides it is time to sell a business, some might wonder whether it is wise to be buying. Then in 2002, Lipsith shocked retail-watchers by opening a large store on London's Oxford Street. Analysts rightly had grave doubts about the prospect for the dowdy Allders offering in the fashion- conscious capital. But the new property enabled Lipsith to move his office from suburban Croydon to the heart of the West End.

Yet its presence in suburban Croydon was the biggest attraction Allders had to offer when, a year later, Lipsith sought a possible escape route.

Property group Minerva was plotting a massive redevelopment in the town and the sprawling Allders site was key to it. Minerva bought the business with a view to getting the site, which it has now done, although the aim may not have been made entirely clear to Green when he became involved.

Green wanted to buy a retail business and Minerva enabled him to do it, taking a 60% stake in Scarlett Retail, a new company set up to back Green's purchase of Allders.

Had he made a success of the business, Green would have become a rich man. Instead, the former Debenhams chief executive is out of a job, there are some very unhappy bankers at Lehman Brothers - who had to write off most of the debt they took on - and there is a gaping hole in the Allders pension fund.

The stores that Green took on were not in great shape, but he failed to get to grips with the problems. Detail, even his friends admit, is not his strong point. Those running their own business, as he'd said he wanted to do, tend to have every piece of important information in their head as well as at their fingertips. Green, however, continued to operate as if he were part of a large corporation and it was as important to be seen on the party circuit as in the stockroom.

While Green toyed with introducing designer names into his down-at-heel stores, Minerva extracted the Croydon store from the business. An independent valuer determined the price, but the deal still left Allders looking significantly less soundly based. A wretched Christmas signalled the end for Green's big ambitions, and now Allders is being dismembered. Ironically, Philip Green is picking up some of the out-of-town stores that might have been the key to any real survival plans for the group.

By the time he signed the deal, Philip Green probably knew more about the daily takings and outgoings of the properties than Terry Green knew when he was running them. Which is why only one of them will ever be a very rich man.

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