The highest paid director at Sir Philip Green’s Arcadia Group received a 38% pay rise, to £1.55m, last year as the group cut 2,000 jobs.
The director, thought to be Ian Grabiner, Green’s right-hand man, was paid £1.55m in the year to 30 August 2014 according to accounts filed at Companies House. Total payments to directors rose to £4.22m, up from £4.05m a year before, despite board members dropping from five to three.
The payouts came as sales at the group, which owns the Topshop, Topman, Miss Selfridge, Evans and Wallis outlets, remained steady at £2.71m but operating profits (before exceptional items) slid to £172.3m against £204m.
The fall reflects a tough time for fashion retailers in which “market conditions remain challenging and very competitive with new entrants across all channels,” according to the accounts for Taveta Investments, a holding company controlled by Tina Green, Sir Philip’s wife.
The fall in profits was also partly the result of a comparison against a 53-week financial year in 2013 as well as difficulties at the BHS chain, which was offloaded for £1 to a group of little-known investors in March.
The group’s sales rose by 8% overseas, mainly in the US and Ireland, to £397m and slipped by 2% within the UK to £2.3bn – with declines in sales at Arcadia’s other chains as well as BHS.
As it tried to cut costs in the tough market, the group reduced its number of staff by 2,000, including nearly 400 job cuts at BHS.
Arcadia’s net debt fell by £100m to £193m and investment in the business rose to £107m from £93m in the previous financial year.
Meanwhile companies controlled by the Green family received £20m in payments to redeem loan notes relating to BHS group and interest of £11.5m on further outstanding loans. The Green family’s Carmen property company also received £10.93m in rent on BHS properties. Jersey-based Carmen has since sold the 12 BHS properties to the chain’s new owners.
Last week it emerged that BHS’s pension scheme deficit rose to £139m in the year to 30 August 2014. The funds’ trustees are in negotiations with BHS’s new owners, Retail Acquisitions, over how to handle the deficit, the value of which is likely to increase significantly under a triennial valuation currently underway.
