Philip Green asked HSBC to help find Arcadia buyer, leak claims

Sir Philip Green asked HSBC to help him find a buyer for his sprawling retail empire, according to a leaked email that casts doubt on the tycoon’s vehement denial of reports he was plotting a sale.

The billionaire, whose Arcadia Group includes fashion outlets Topshop and Miss Selfridge, discussed plans to sell his retail brands over dinner with two bankers from HSBC in February 2016, the email shows.

The message, obtained by the Sunday Times, indicates that HSBC’s UK chief executive, Ian Stuart, and managing director, David Barraclough, met Green to discuss succession planning after it became clear that neither of his children, Chloe and Brandon, will take over as chairman.

Barraclough wrote to colleagues depicting Green as “distracted” by the impending crisis at BHS, the high street chain he sold to serial bankrupt Dominic Chappell before it collapsed, leaving behind a £571m pension deficit. Green had also become concerned by a ballooning pension deficit within Arcadia that was set to hit £900m, according to the email, and realised he might have to sell Topshop to a buyer, potentially from China, to raise enough funds to plug the gap.

In an email to colleagues the day after the dinner, Barraclough wrote: “As emotions were running high, PG’s [Philip Green’s] thinking was the need to sell, and having heard my comments . . . [he] sought our assistance and offered to meet any Chinese prospective partner we consider appropriate.

“After further discussion, PG agreed to source a sale solution. The strategy should be to sell Topshop/Topman separate to the rest of the Arcadia portfolio of lesser brands. Whilst the Topshop/Topman sale should be straightforward, he accepts residual Arcadia will be a tougher ask and may need to be sold by way of individual brands over a protracted period.”

Barraclough added that Green planned to use any proceeds from a sale of Topshop to pare down Arcadia’s pension deficit and realised that the funding shortfall was his responsibility and “entirely for his a/c [account].”

He added: “Whilst the Topshop/Topman sale should be straightforward, he accepts residual Arcadia will be a tougher ask and may need to be sold by way of individual brands over a protracted period.”

The email contradicts sections of a strongly worded statement issued by Arcadia last week in response to suggestions that Arcadia was up for sale.

Arcadia denied that talks about a sale to Chinese textiles group Shandong Ruyi had taken place with HSBC, adding that there was “no truth” in the suggestion that Green has been “seeking a buyer for some time”.

A spokesperson for Green said he did not wish to comment on the leaked email.

However, Green is expected to stick by his denial that he held talks to sell all or part of Arcadia with Shandong Ruyi, which already owns several European fashion brands, including the menswear brands Gieves & Hawkes and Aquascutum.

Shandong Ruyi has also denied being involved in any talks.

The billionaire’s plans for his retail empire, which employs 22,000 people, are attracting particular scrutiny after the controversy caused by the nature of his exit from BHS, which later folded.

He faced fierce criticism from MPs for selling the business for £1 to serial bankrupt Dominic Chappell, who was last week ordered by a court to pay £87,000 for failing to disclose vital details to the pensions watchdog as part of its investigation into BHS.

Green eventually agreed to pay £363m into the BHS pension scheme to help bridge a £571m funding gap, as part of a settlement with the Pensions Regulator.

The work and pensions committee chair, Frank Field, who led the inquiry into the collapse of BHS and has been a vocal critic of Green, has previously sought assurances about his plans for Arcadia and its pension fund. Arcadia responded by highlighting a plan agreed last year to double pension contributions to £50m a year to help prop up two schemes with 11,000 members and a combined deficit of nearly £1bn as of March 2016.