The prospect of becoming plain old Mr Green again may be troubling ‘Are-you-staring-at-me’ Sir Philip Green less than we might imagine. Because compared to the other problems facing him, his knighthood is arguably pretty small beer.
Take the value of sterling: since the Brexit vote, the collapse in its fortunes has sent the currency tumbling in value by as much as 20 per cent. Then if you consider that almost everything sold in Sir Philip’s shops – be it Topshop, Topman, Dorothy Perkins or Miss Selfridge – is imported from overseas (from places like Bangladesh, China or India), it doesn’t take long to realise that somewhere along the way a sizeable chunk has been gobbled out of his margin. And that’s got to hurt much more than anything Frank Field says.
Now Green will more than likely have a very clever solution of some sort in place to minimise any currency fluctuations – but ultimately, if the pound falls by 20 per cent and stays there, then he or his suppliers are going to be saddled with the loss. And sterling’s slide isn’t his only problem. Already in these far-flung, cheap locations where his garments are typically made, there is wage inflation. Workers there see all our lovely stuff on telly and want it for themselves – and who can blame them? As a result Sir Philip’s make-it-for-peanuts suppliers are coming under cost pressures, too – pressure that will only get worse (as they, but not their staff, see it) as time goes by. And the bad news for Sir Philip doesn’t even stop there, because the fall in sterling is also bringing inflation home, too. Inflation now stalks the pay packets of each and every one of the thousands of his low-paid retail employees – those who slave away in his shops the length and breadth of our high streets. So rather like one of his own sweaters, if placed in the hot drier for too long, could it be that Sir Phil’s entire business model is shrunk? Has the route to riches that he’s exploited so aggressively and successfully now been worn threadbare? It would seem so. And he’s not alone of course. Indeed, all those clothes brands that eagerly off-shored their manufacturing in the eighties, nineties and noughties must now be asking if it was such a good idea to do so. Like Sir Philip’s business, those retailers could well see something like 20 per cent wiped off their revenues. And in a competitive business environment with tight margins that could easily spell doom. One radical answer, of course, is re-shoring – bringing back the manufacturing. It probably wasn’t what George Osborne had in mind when he hailed the march of the makers, but perhaps this could be what his northern powerhouse is all about. It may not be complex bioscience or business services that will regenerate the north, but rather boxer shorts, pyjamas and – who knows? – fashionable slumber-wear laced with diamante crystals. When my great-grandfather Ernest Drabble, a Derbyshire mill owner, died suddenly while walking in the Peak District in 1928, 250 of his employees (about two thirds of them all) attended his funeral. How many of the 22,000 former employees of BHS would turn up at Sir Philip’s funeral? Presumably just the ones who want to make really sure that he is dead. The controversy that’s surrounded Sir Philip’s brand of money-making does not appear to show capitalism in its best light, which for those of us who believe in capitalism, is bad news because it brings the system in to disrepute. (It’s good for the Corbynistas out there, mind). Perhaps if Sir Philip built a few factories in the communities worst-affected by joblessness, and invested in well-paid, skilled jobs and technology, then people would take a different view of him and capitalism in general? Either way, it might also do wonders for his bottom line because if sterling stays where it is, then something will have to give, and you can be sure it won’t be his yacht.
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