Lady Tina Green, the ultimate owner of the Arcadia fashion group, has announced she is accelerating a planned £50million contribution to its pension fund after the firm collapsed into administration.
Last year she committed to paying £100million into the fund in three instalments as part of a restructuring plan for the group that was agreed by creditors.
In a statement issued this afternoon she said two instalments of £25million had already been paid, with a third and final instalment of £50million not due to be paid until September 2021.
However, the statement said: ‘Lady Green is going to bring this payment forward to be paid in the next 7/10 days to complete the £100million commitment of payment.’
The move came after Ed Miliband said Lady Green and her husband Sir Philip must cover the entire shortfall in the company’s pension scheme. Analysts estimate a pension fund deficit of £350million.
Mr Miliband, Labour’s shadow business secretary, said Sir Philip ‘owes a moral responsibility’ to Arcadia workers to fill the pensions blackhole.
Meanwhile, Boris Johnson said at lunchtime that Business Secretary Alok Sharma has written to the Insolvency Service to examine the conduct of Arcadia’s directors.
Some 13,000 staff working across Arcadia brands which include Topshop, Dorothy Perkins and Burton, now face an anxious wait, with Deloitte brought in to handle the next steps after the pandemic ‘severely impacted’ sales.
Some 13,000 staff working across Sir Philip Green’s Arcadia brands which include Topshop, Dorothy Perkins and Burton, now face an anxious wait after the company collapsed into administration
Arcadia, which runs 444 stores in the UK and 22 overseas, said 9,294 employees are currently on furlough.
No redundancies have yet been announced and stores will continue to trade, the administrators said, with many due to reopen today as England’s lockdown was lifted.
A spokesman for The Pensions Regulator said yesterday it was working ‘to protect the position of the Arcadia pension schemes’ members to the fullest extent possible’.
Mr Miliband told Sky News this morning that Sir Philip should cover the shortfall in the pension scheme as he lashed out at a £1.2billion dividend paid by Arcadia to the tycoon’s wife Tina, the group’s ultimate owner, in 2005.
Asked who should plug the gap in the pension fund, Mr Miliband said: ‘Philip Green. Philip Green took a £1.2billion dividend out of Arcadia, albeit some years ago.
‘That is multiple times more than the pension fund deficit. He owes a moral responsibility to those 12,000 workers who are worried enough about losing their job, they should not be losing their pensions as well.
‘It is totally unacceptable. They should not pay the price of his greed. His wife got this £1.2billion dividend, tax free, not paying any taxes, it is not acceptable.
‘I want the Government to step up and let’s all exert that pressure as much as we can, working with the pensions regulator, to put pressure on Philip Green to do the right thing.’
Asked whether he believed Sir Philip will pay to cover the pension fund shortfall, Mr Miliband said: ‘I don’t know. In the BHS case which some people will remember people thought he wasn’t going to pay up, now he didn’t fully fund the deficit but he was forced to make a contribution.
‘I think we have got to do the same thing again. Then there is a deeper issue about how we end up in this situation where people can pay themselves these absolutely eye watering dividends and then leave the pension fund in the lurch.’
The collapse of Arcadia came as Debenhams, which was already in administration, said it would start a liquidation process after a possible rescue deal for the company fell apart.
The combination of the problems faced by the two high street giants means the jobs of some 25,000 staff now hang in the balance.
The issue was raised at Prime Minister’s Questions by Labour leader Sir Keir Starmer.
He told the Commons: ‘That’s put 25,000 jobs at risk and caused huge anxiety to many families at the worst possible time and threatens to rip the heart out of many high streets in our towns and cities.
The collapse of Arcadia came as Debenhams announced it would start a liquidation process
‘So can the Prime Minister tell the House what is he going to do now to protect the jobs and the pensions of all those affected by these closures?’
Mr Johnson replied: ‘We’re looking at what we can do to protect all the jobs that have been lost across the country and [Mr Sharma] has written to the Insolvency Service to look at the conduct of the Arcadia directors.
‘We will be doing everything we can to restore the high streets of this country with our £1 billion high streets fund and the levelling up fund.’
Mr Sharma tweeted the letter he sent to the Insolvency Service. In it he said: ‘As you know, the administrators are bound to provide you with a report into the conduct of the directors of the group within three months of their appointment.
‘Given the significance of this case and its implications for thousands of suppliers, pensioners and employees, I would be grateful if you would review their report rigorously and expeditiously as soon as you receive it.
‘If you decide that there are grounds for an investigation, I would ask that it looks not only at the conduct of directors immediately prior to and at insolvency, but also at whether any action by directors has caused detriment to creditors or to the pension schemes.’