Sir Philip Green to merge Arcadia and Bhs

Sir Philip's retail execs will be feeling nervous today, as he prepares to merge his biggest brands...

Last Updated: 06 Nov 2012

Sir Philip Green is apparently planning to bring British Home Stores under the Arcadia umbrella – a move that could see a cull of management jobs as he combines the two companies, which have previously been run as separate entities. But with the high street feeling the squeeze as more shoppers take the radical step of leaving their money in the bank (or under the mattress), Sir Philip is clearly on a mission to cut costs – and this is an obvious way of doing it. So obvious, in fact, that it’s not entirely clear why he hasn’t done it before. Perhaps Kate Moss gave him the idea during one of their many nights out on the town?

The new set-up will see Bhs run in much the same way as the other brands in the Arcadia stable (which include Top Shop and Miss Selfridge), allowing Green to combine head office functions like marketing, finance and supply chain. This will almost certainly mean that some executive roles will become surplus to requirements – hence the likely nervousness this morning. Reports also suggest that some of the bigger Bhs stores will be converted into ‘houses of brands’, featuring a number of Arcadia outlets under one roof. Again, the economies of scale are obvious – but it could be bad news for anyone running a smaller outlet store in the same town, which might well be ‘rationalised’ as a result.

Bhs became a real success story for Green after he bought it in 2000 (much to many people’s surprise), although its sales have been flagging recently. Arcadia has also seen a mixed bag of results lately: the likes of Dorothy Perkins and Burton have been struggling, but Top Shop and Miss Selfridge have continued to produce record sales and profits (possibly because their younger clientele have more disposable income/ more money than sense). So it’s no surprise that Green is looking to retrench now, particularly with little sign of the high street gloom receding.

We suspect this is unlikely to be much consolation to the execs affected by the merger, but we were reminded today that retail management can be a lucrative occupation, at least for graduates. A survey released by Tesco claims that retail execs earn a total of £140,000 by the time they’re 25, after just four years on the job – second only to management consultants (no mention of bankers, oddly). By contrast, architects supposedly rack up a measly £35,300 in their first four years, and junior doctors an almost equally miserly £40,333. And next on the list? Newspaper journalists, with £63,550. Cheap at twice the price...

In today's bulletin:
Cadbury Milking the gloom as profits jump 30%
Sir Philip Green to merge Arcadia and Bhs
Airports and trains struggle as passenger numbers drop
SMEs stamp their feet over Royal Mail sale
Non-exec directors getting more for less

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