Links in chain that hoisted Green to top

Published on Thursday 17 November 2005 00:59

IN MAY 1990, Philip Green took charge at the Scottish-based discount clothing chain What Everyone Wants (WEW), owned by Gerald and Vera Weisfeld.

It was a master move, since Amber Day, the London-based company where he had been chief executive since 1988, was facing a catastrophic decline in sales and profits as recession tightened its grasp on the high street. With the help of WEW, a company that had a long record of growing through recessions, the 1991 figures at Amber Day looked excellent. It went on to be named "share of the year" in December 1991.

At first, Green and the Weisfelds, who now held 17 per cent of the Amber Day stock, worked amicably together. In September 1990, Gerald Weisfeld had been best man at Green's wedding to Tina Palos. Soon afterwards an irreconcilable difference of opinion began to emerge.

Weisfeld had made his reputation as a retailer through his skills as a buyer, an ability that allowed him to pick up very fashionable garments at very competitive prices. His policy on pricing them in the shops was very simple - the price would be set at a third of that asked for a similar garment in the mainstream shops.

Green thought this a little too generous to the customer. He wanted to "make the business sweat" a little, by gently increasing the price tags. On this issue of principle the Weisfelds pulled out and sold off their shares.

This left Green in undisputed command at the Glasgow headquarters, a position that appealed to his growing self-belief in his abilities. But while he was in command, the business was by no means a one-man band.

For years the Weisfelds had followed a policy of recruiting talented young people and training them as managers. This pool of talent was universally known as "the execs". They represented a golden legacy that Green inherited from the Weisfelds. Many of them have gone on to occupy important management positions in the UK retail trade.

Two in particular were to play a central part in Philip Green's meteoric rise to fame and fortune after 1999.

One was Elaine Gray. Like Vera Weisfeld, she was from Coatbridge. She had left school at 16 and gone straight into WEW.

Vera Weisfeld had promoted her to work alongside her husband in buying stock. Gray soon won her spurs and was recognised as having exceptional buying talent, being promoted to head her own department.

It was Green's good fortune that she decided to stay on after the Weisfelds left. Green was not always an easy person to work with - he was given to sharp bursts of temper and colourful language - but he had an undoubted commitment to the business, commuting from London to the head office of WEW in the shadow of Celtic Park. He was also someone who recognised talent and who was prepared to delegate decision making.

Gray settled in and was soon promoted to the board. Some say Green's legendary skill as a buyer was largely imparted to him by this young Glaswegian woman. What is certain is that she and Green remained close, even after he was forced out of Amber Day by the shareholders when he badly missed a profit forecast in September 1992.

Green complained that the rules imposed by the stock exchange and the need to keep shareholders sweet made it difficult for entrepreneurs like himself to thrive. From now on he swore he would run only private companies, companies that had no quotation on the stock exchange and were not subject to strict stock exchange rules. It was a position with which Gray could sympathise.

In later years she was to play a central role in Green's enterprises, helping to run the Owen Owen chain of department stores (for which she was rewarded with a stake in the company) and eventually becoming chief executive of Mk One, another Green discount chain.

Her skills were so valued that she was called in to help sort out the Bhs business after Green bought it in 2000.

Even more central to Green's rise to supremacy in the retail world was a young Londoner called Ian Grabiner.

Grabiner had been working as a manager at River Island when he was interviewed by Vera Weisfeld over lunch at Claridges. She was struck by the sharpness of the 30-year-old and promptly invited him to come to Glasgow to take over as managing director at WEW. This was in 1988.

Grabiner, who sprang from a middle-class London family (he is a cousin of the lawyer Lord Grabiner) found the atmosphere at WEW much to his liking. He married a Glasgow woman and was given a special wedding reception by the Weisfelds.

At WEW he was to form a close collaboration with Green. Together with Gray they formed the triumvirate that ran the business, introducing new technology to control stocks and reduce the need for extended sales.

The two men obviously respected each other's talents. When Green departed from Amber Day in September 1992, Grabiner stayed on and helped produce better figures in 1993. But the two stayed in touch until the moment came for Grabiner to join Green years later as chief operating officer at Green's Arcadia group , where he has helped Green turn in very respectable profit figures. He has, as a result, become very rich.

It was through Grabiner that Green was to meet a young man who was going places, Tom Hunter. Hunter (now Sir Tom) was in 1991 at an early stage of his remarkable career. He had started with nothing and built up a flourishing empire selling trainers and shell-suits on stalls within much larger clothing shops. In 1989 he had opened the first shop of his own under the Sports Division name in Paisley.

He had the knack of picking the right people to run his growing chain of stores. He kept his finger on the pulse of the leisure fashion scene.

Hunter had known Grabiner since his River Island days and Grabiner brought Green and Hunter together.

Had Hunter not met Green there could never been a historic meeting between the two men and a third partner, another remarkable Scotsman by the name of Peter Cummings.

How Hunter and Cummings helped propel Green towards billionaire status is the subject of tomorrow's article.

• Top Man - How Philip Green Built his High Street Empire, by Stewart Lansley and Andy Forrester, is published in hardback by Aurum Press, priced 18.99