Top Man How Philip Green Built His High Street Empire

By Stewart Lansley and Andy Forrester 2005 Aurum Press Ltd pp 278

I had never heard of Philip Green up until a couple of years ago, not that he is that well known to the general public even now. The most amazing thing about him is how much money he has made in such a short period of time.

They say just over a decade ago he was a rag trader a mere multimillionaire and barely known. He is now worth £4.5 billion and is estimated to be Britain's fifth richest person. He made his first billion in record time and then went on to quadruple his wealth in a few years.

He now owns via a private company Bhs and Burton, Miss Selfridge and Topshop about 2,500 shops in all.

In 2004 he became well known as he tried to take over Marks and Spencer which had been the crown jewels of British retailing but has been languishing for the last few years. It would have cost over £11 billion.

The book explains how he made his money and his drive and determination.

He lives in Monaco and all his wealth is in his wife's name so he pays no taxes on it. He is abrasive, vulgar and uses a lot of expletives. No one would speak about him on the record and the book was unauthorised.

He has had some outrageously expensive birthday bashes where he jets out people to lavish parties.

It was interesting that he had a few friends in his early years that turned out to be less than straight but now the city has taken him to their hearts and they are prepared to lend him money.

Although these books depict sucessful businessmen as being individualists they always get there by having a team of people they use all the time. No one can make it entirely on their own.

His first few business ventures failed owing a lot of money so not everything he touched turned to gold.

He was badly stung in one of his early ventures as he ran a public company and was criticised for running like he owned it entirely.He learnt from that not to go public again.

His technique was to buy things at a good price break them up and sell them off at a profit. He claims he is the greatest retailer ever but his is accused of not being someone who can actually improve the sale figures.

He started buying up part of the Sears group which had been built up by Charles Clore. Clore's formula was taken on by Green "Stablise management, increase margins, increase the profits."

He successfully does this every time. He is accused of not being able to increase sales but the main way that other people did was by reducing prices, reducing margins and selling more to increase turnover but not the profits.

Clore recognised that many firms were grossly undervalued on the stock market.That is they had assets that were more valuable than their stock market listing. As a result he bought up shoe shops such as Freeman Hardy and Willis, Saxone, Dolcis, Manfield, Trueform, Cable & Co, Hush Puppy and others.

Clore bought the business rationalises them and sold off surplus property and became very rich. After Clore died the company stagnated and Green started buying them to do the same again.

He started getting rich backers for his scehmes because they could see that he would make them a lot of money.

Kalashnikow Test

He reckoned that in the 1990s you could go to Oxford Street shops to see how they were getting on " You could walk into a shop with a machine gun fire off a whole clip of ammunition and you wouldn't hit a customer|"

M&S had in 1997 record profits of £1 billion but two years later sales had slipped and profits had halved. In about two years the value of the company had halved. Green started to stalk M&S .Eventually it failed but his banker had pulled out and there had been a barrage of negative press.

He turned his attention to BHs and got it.He reorganised it and it became the basis of his fortune.

He repaid the borrowing in record time.He took on the suppliers and squeezed them Also he cut costs,he improved decision making. This time he kept the company intact. He remortgaged a handful of stores repaid his bankers and made a tidy profit. After that he became a billionaire. He did this in less than a decade. In 2000 he was 216th on the rich list in 2001 he was 159th. Over the next year he overtook Richard Branson.

As a private company he does not have to tell people his profits but he liked to boast about it. He wrung better deals out of supliers and bought direct. He improved the speed of supply as it was fashion industry.

He did a lot of the negotiating himself he sources goods as cheaply as possibe and sells on at the best margin. He buys cheap and sells expensive.

He bought BHs and Arcadia and one of his colleagues Sir David Barclay said Philip only think about the quantum leap what he meant was to only go for very large scale take overs. That is why he went again for M&S and failed again in 2004.

They constantly said they he is a one trick pony in that he can engineer businesses to have a healthy bottom line but not to muster top line growth. They mean he is not able to increase sales.

He does not seem able to start businesses from scratch like Branson and Stelios and James Dyson he said it is easier to rebuild than build

His skills are in deal making and improving processes

He has yet to demonstrate that he has the most crucial skill that is to increase sales.He still has to make the quantum leap.

I found the book fascinating and I read it in about 24 hours.

It proves that you are better off making deals than thinking up brand new ideas or businesses. He is Britains fifth richest person and he is still being criticised for not being able to increase sales.What more do they want?