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The Collapse of Arcadia Illustrates Yet Again How Entrepreneurship Is More Secure Than Having a Job
Especially when your company is run by people not interested to do so.
That’s it. Arcadia, Philip Green’s retail empire making up about 12% of England’s retail clothing shops, has collapsed.
It leaves behind 13 000 jobs and about 500 clothing stores.
The Signs of the Inevitable Doom Were Clear
Green and his wife Tina acquired Arcadia in the year 2000. At the time, Green was chairman of the retail company Amber Day, and Tina had various businesses no one really ever understood what about.
Quickly, they set up a structure to avoid paying taxes. Tina went to live in Monaco, famous for its inexistent tax rate on personal income, and subsequently acquired 95% of Arcadia.
In effect, Philip Green was CEO of Arcadia but did not own it. His wife did.
With Tina protected from taxation, Green (Arcadia) paid her a £1.2 billion dividend in 2005. The pre-tax profit of Arcadia was “only” £300 million.
This sign alone should have been sufficient to understand that neither Green nor his wife were interested in the long-term management and…
