5.

High Times

The 220 guests who arrived at Luton airport on the morning of 14 March 2002 had been told only to pack for hot days and cold nights, and to bring a piece of flesh-coloured underwear. They were greeted by a check-in sign: ‘PG50 Airways. Getting a great party off the ground.’

In the departure lounge, a muzak-style band played Frank Sinatra’s ‘Fly Me to the Moon’. Philip and Tina Green mingled, embracing newcomers and serving glasses of Buck’s Fizz. As well as Green’s business contacts – including Richard Caring, Tom Hunter and Stuart Rose, the new boss of Arcadia Group – there were B-list celebrities such as the TV prankster Jeremy Beadle, the former Page Three girl Jilly Johnson and the racing driver Sir Stirling Moss, who was married to Tina’s sister, Susie. Caring’s wife, Jackie, who thought Tina’s tastes vulgar, was notably absent.

Green’s fiftieth birthday, organized by Tina at an estimated cost of £5 million, loudly announced his arrival to the big time. A year earlier, Hunter’s wife had hired an events company called Banana Split to put on his fortieth birthday party in Cap Ferrat, with entertainment from Kool and the Gang and Stevie Wonder. It had cost £750,000. Everything about Green’s party was designed to be bigger and better. Tina had booked a new luxury hotel in Cyprus, the Anassa, and hired Banana Split to plan a weekend of ridiculous extravagance. The preparations required fifty-six people and took three weeks. Thirty articulated trucks delivered materials ranging from 18,000 flower stems to four drum kits. A fleet of mobile generators pulled up with enough power for the whole of Cyprus. Tina ordered 1,000 bottles of wine, 400 bottles of champagne, 400 oysters and 40 kilograms of caviar.

Even the flight safety video was personalized. ‘It is vital at this stage that all your hand luggage is labelled correctly,’ a polite voice told guests as they boarded the plane. ‘The appropriate labels should read Louis Vuitton, Christian Lacroix or Chanel. For this flight only, British Home Stores is also acceptable.’ There was a heavy-handed joke about cocaine. ‘At this point, I would like to introduce you to the captain,’ the voice said. An image of a boggle-eyed pilot appeared on the screen. ‘His name is Charles … Some of you may have been this high with Charlie before, but for others it’s a new experience.’ There was applause and laughter.

A candle-lit champagne reception on the first night oiled the crowd for a performance by the jazz guitarist George Benson. The party carried on until 2 a.m., with Hunter leading a raucous round of Scottish country dancing. The next day, in the Anassa’s sunny garden, Tina presented her husband with a series of gifts. The first was a solid gold Monopoly set from the jeweller Asprey, complete with real money. Every square referenced one of his deals. Then a scantily clad model revved up on a Harley-Davidson with the licence plate PG50, and Richard Caring gave his business partner a red Ferrari Spider. As the crowd tucked into a buffet lunch of lobster and scallops, a grey-haired figure in a jacket and tie trotted down the steps to the terrace with a microphone. Michael Aspel, the host of This Is Your Life, asked Green, ‘Are you game?’

In the hotel’s ballroom, Aspel invited the most important people in Green’s life to the stage. Tina came first – then Alma took the microphone and opined that her son had done ‘not bad, for somebody with no O levels’. There were several pre-recorded video appearances. Green’s old headmaster from Carmel College, David Stamler, wished him ‘a very warm mazel tov’. Looking like loony pensioners, Sir David and Sir Frederick Barclay – who had been knighted two years earlier – fired a six-gun salute from their castle. Puff Daddy, Sylvester Stallone, Britney Spears and Bruce Willis sent separate messages. Stallone promised, ‘Men don’t really become sexy until they’re fifty, so I can imagine you’ve got nothing but green lights and blue skies ahead.’ Morris Keston, the Tottenham Hotspur superfan, Jeff Randall, who had become the BBC’s business editor, and Ian Grabiner, Green’s lieutenant, came on stage wearing Spurs shirts with Green’s name on the back and the number 50. Terry Venables toasted him via video link. He cracked a joke about his nightmare with the Department of Trade and Industry, saying, ‘If you do take over Tottenham at some stage, remember – leave me out, will you?’

A black-tie dinner followed in a huge marquee. Randall stepped to the microphone. ‘Ladies and gentlemen, I don’t have to tell you what a star Philip is,’ he said. ‘We all know that. That’s why we’re here tonight.’ Green took to the stage and sang, to cheers, ‘Where do I begin, to tell the story of how strange my life has been?’ He quipped, ‘That’s the cabaret tonight.’ Then he launched into a speech, welcoming Prince Albert of Monaco, who had joined the party that day. Green raised a glass of red wine to Tina, saying, ‘She has the will to win, and boy oh boy, can she deliver.’ Tina clasped her hands to her face as her husband led three cheers for his wife. After dinner, waiters brought out an enormous five-tiered cake with miniature models of Green and his family enjoying the event. He turned to the crowd and announced ‘our present to everybody’ – Tom Jones. The music legend revived some of his classics like ‘Help Yourself’, but he was only the warm-up. Green returned to the stage to introduce ‘thirty-five guys, one of the best live acts in the world – Earth, Wind and Fire’. The band went down a storm, and the set ended with Green and his entourage dancing wildly on stage. On the way out of the marquee at the end of the night, he was mobbed by drunken friends singing Stevie Wonder’s ‘Happy Birthday’. ‘How are you going to deal with tomorrow?’ Green asked Chris Gorman, the future millionaire owner of the Gadget Shop, who was singing lustily in a top hat, clutching a bottle of champagne. ‘Philip, I always deal with it,’ Gorman giggled.

The best was yet to come. The next morning, guests awoke to find togas hanging on their bedroom door handles – hence the need for flesh-coloured underwear. ‘They look completely see-through, but they’re not,’ Tina reassured the crowd at breakfast. ‘Anyway, we like to see bums – men’s bums, women’s bums.’ That evening, Green dressed and behaved like Emperor Nero. Wearing a gold-trimmed toga and a laurel wreath, he led a procession down an avenue of flaming torches to the marquee, which had been opulently redecorated as an amphitheatre. Holding his eleven-year-old daughter by the hand, Green barked in a photographer’s direction, ‘No pictures when I come with Chloe, or I’ll break his camera.’ After dinner, Green again praised a tearful Tina. He said, ‘Tonight, you’ve made everybody sparkle, so I thought it’s only fair I do my bit.’ Chloe and her eight-year-old brother, Brandon, gave their mother a pair of diamond earrings in champagne flutes. ‘I love this man,’ Tina declared. Rod Stewart bounded onstage and sang hits such as ‘Maggie May’, then there was a final round of speeches. Tom Hunter said, ‘Philip Green has taught me to believe in the impossible, and I think this weekend the impossible has been achieved.’

Green’s scramble to the top of the business food chain was all the more remarkable for its speed. In three years, he had gone from pariah to emperor. The starting point was Sears. In January 1999, the burly corporate raider swung into the retail group’s dilapidated headquarters behind Selfridges in the West End like a human wrecking ball. He delighted in undermining the senior staff who had presided over its decline, such as Roger Groom, the property director. ‘Roger, go and make us some tea,’ Green would snap as he arrived in the morning. Groom left at the end of January with a £318,000 pay-off. One of the few people to stand up to the new owner was Paul Coackley, an analyst in the finance department. Coackley told Green, ‘You own the business. You can have whatever information you want, but not if you speak to me like that.’ Green immediately made him Sears’ finance director.

The Sears takeover electrified the retail industry and set the newspaper market columns fizzing with rumours of bids for House of Fraser and Storehouse, the parent company of BHS, Habitat and Mothercare. Having burned their fingers on retail deals in the late 1980s, private equity firms started prowling the high street again. John Richards, the analyst who had worked on the abortive float of Olympus, said, ‘People saw Philip Green making loads of money and everyone said, “I want some of this, this is a gravy train.” Which it was, until 2007.’

In July 1999, before Green’s break-up of Sears was even complete, the Mail on Sunday linked him to possible bids for Marks & Spencer and J. Sainsbury. As a strong, self-willed character, he was beginning to see himself as the natural heir to M&S’s two towering patriarchs, Simon Marks and Israel Sieff. Green became obsessed with taking over their business.

M&S, founded in 1884 as a penny bazaar at Kirkgate market in Leeds, represented the crown jewels of British retail. But it was not the invulnerable fortress it had once been. While Green had been concentrating on Sears, M&S was in the throes of a bloody succession battle. Sir Rick Greenbury, its autocratic bully of an executive chairman, had pushed the company to make record pre-tax profits of £1.1 billion in 1997, topped by £1.2 billion in 1998. Stretching the business that far proved unsustainable, and in 1999 profits collapsed to £634.6 million. At the same time, Greenbury’s relationship with his successor turned poisonous. Greenbury resigned in June. Peter Salsbury, an oddball who had until then concealed his contempt for Greenbury behind a mild veneer, rampaged around sacking staff and severing decades-old contracts with suppliers. M&S’s share price tumbled as it slipped from success story to crisis.

Green quietly began putting together a takeover plan codenamed Project Mushroom. To run M&S if he won, he lined up Allan Leighton, the charismatic boss of Asda, Richard North, the finance director of the Bass leisure conglomerate, and Terry Green, the boorish yet high-profile chief executive of Debenhams (who was no relation). He sounded out Rupert Hambro, a silky-smooth old Etonian, to be chairman. Hambro was struck by Green’s greediness in terms of the shareholding he expected to take, and he also noticed the only thing Green talked about was realizing value from M&S’s properties. But he agreed to think about it.

Green approached the investment bank Merrill Lynch to see if it would act as their lead adviser, which prompted a discussion among the bank’s senior ranks. Paul Roy, head of equity markets, had come across Green when he worked at Smith New Court, Amber Day’s broker. He dissuaded his colleagues with a simple message, ‘No way.’ Simon Mackenzie-Smith, a Merrill Lynch managing director, was friendly with a member of Green’s bidding team. He gave his contact some off-the-record advice. ‘The only way I can see this working is if you keep Philip in a box where he’s just doing the finance,’ he said. ‘You’ll have to do all the City-facing stuff and talk to the press.’ Green’s team member asked the banker if he could sketch out the structure on a piece of paper. Puzzled, Mackenzie-Smith obliged. The individual then took the idea to Green. ‘Box?’ Green exploded. ‘You’re not putting me in a fucking box!’ The paper in his acolyte’s hand began to tremble. Green snatched it from him. ‘You didn’t write this!’ Green said. ‘Who did?’ The disintegrating executive stammered, ‘M-M-Mackenzie-Smith from M-M-Merrill Lynch.’ Green growled, ‘That double-barrelled cunt. What the fuck does he know?’

With Merrill Lynch out of the picture, Green turned to his old friend Sir Laurie Magnus, who had moved from Samuel Montagu to an American investment bank, Donaldson, Lufkin & Jenrette. Magnus persuaded his new bosses in New York to give Green a chance.

Green was amazingly fortunate that his emergence as a serious player coincided with a brief period when a handful of banks were prepared to lend large amounts of money to lone-wolf dealmakers. The previous summer in St-Tropez, he had been introduced to Robin Saunders, a young American woman who was head of something known as ‘securitization’ at the London office of WestLB, a German state-owned bank. Securitization is a way of raising money by issuing bonds backed by a company’s future income stream, and in the late 1990s it was still seen as a fairly exotic tool in Europe. Saunders, who was born in North Carolina and raised in Florida, was ambitious and cool. After pulling off pioneering securitizations in Italy and Portugal, she became famous overnight for helping the Formula One tycoon Bernie Ecclestone refinance the sport in 1999 through a $1.4 billion bond backed by its future broadcasting revenues. The Daily Telegraph called the American banker ‘Formula One’s fairy godmother’ and The Sun dubbed her ‘the City’s answer to Claudia Schiffer’. When they met on the French Riviera, Green was still basking in the glory of his Sears break-up. Saunders saw him as a talented underdog. She agreed to provide almost £6 billion of debt from WestLB to support his move on M&S.

M&S’s shares sank to an eight-year low of 228p in November 1999. They rallied to more than 300p before Christmas as newspapers floated rumours of a takeover bid from Tesco. At that price, M&S was valued at £9 billion. As with Sears, the hidden gem was the property portfolio. M&S owned almost all the freeholds to its 300 stores. The properties were valued at less than £3 billion in its books, but they were probably worth a lot more. Like Sears, M&S had been sloppily run, with high costs at its Baker Street headquarters and poor performance from its fashion division. It was still without a chairman after Greenbury’s departure. Through Sir David Sieff, the last remaining family board member, Green tried to contact Greenbury’s temporary replacement, Brian Baldock, but the tough former Guinness director refused to meet him.

On 13 December, Green broke cover. After a weekend of intense press speculation, he confirmed that he had hired DLJ to look at a possible offer for M&S. The prospect of being taken over by the Bond Street Bandit was the nightmare scenario for M&S – worse even than a bid from Tesco and its aggressive Liverpudlian boss, Terry Leahy. Baldock’s war cabinet comprised Brunswick, the PR firm famous for its hardball defence of Imperial Chemical Industries against Hanson Plc in 1991, the stockbroker Cazenove and the investment bank Morgan Stanley. First blood went to Green when M&S reported a fall of more than 11 per cent in like-for-like Christmas clothing sales. In late January, M&S hired a replacement for Greenbury, a dapper but unconvincing Belgian called Luc Vandevelde. The real fightback came when its advisers served Green’s team with Section 212 notices under the Companies Act, demanding disclosure of any shares they owned. Green had none, but Tina’s reply revealed that she had bought 9.5 million shares in M&S in early December, before news of Project Mushroom broke – similar to the trades she had made on Sears. Tina had used fifteen nominee accounts in the Channel Islands to keep her identity secret. She was sitting on a theoretical profit of about £2.5 million.

The M&S team was jubilant. In fact, the Greens had sought legal advice and cleared the purchases with the City’s Takeover Panel in advance. The share trades had been approved because Tina was deemed to be in a ‘concert party’ with her husband and had promised to hand the shares over to the bidding entity at cost price when the time came. But M&S’s advisers leaked her Section 212 reply to two Sunday newspapers, ensuring a splash of lurid headlines about secret share buying. The Sunday Times pushed the story too far. John Jay, the managing editor of business news, filed an article about a ‘share dealing row’, which was transformed by an overenthusiastic news editor into an ‘insider dealing row’ – effectively an allegation of criminality. It was accompanied by a longer piece headlined, ‘Wife of Raider Makes Killing on M&S Deal’. The paper soon apologized, but Green was not satisfied. He launched a libel action. The two sides eventually reached a £100,000 out-of-court settlement.

Jay’s story also contained an interesting nugget that might have been more troublesome for Green on a marital level. Aida Dellal Hersham, attractive, dark-haired and Iranian born, had bought shares in M&S nine days after Green announced his possible bid in December 1999. She had bought several more tranches over the next couple of months, at one point holding a stake worth £200,000. The unexplained connection between Green and a stunning divorcee became the talk of London. Tina was rumoured to have been highly displeased – by the gossip, if nothing else. When the matter was raised again a few years later, in 2004, Green irritably told the Mail on Sunday, ‘I said I had a friendship … My wife is standing here. She knew about it. What’s the issue?’

Green put out a furious statement saying that his family had ‘behaved entirely properly’ over the M&S share trades. He denounced ‘an unjustifiable campaign’ to discredit him, but the damage had been done. Even before the weekend’s stories, DLJ’s New York office had grown sufficiently concerned by Sir Laurie Magnus’s buccaneering client to commission a report from the investigations agency Kroll into Green’s background. A few days after the revelations of Tina’s stake building, the chairman of DLJ in London, Martin Smith, visited the Dorchester and told him it was over. Green pleaded, cajoled and lost his temper, but it was too late. He announced that he would withdraw his interest in M&S. He told The Independent, ‘It’s my prerogative to play or pass, and I don’t need to stress myself with all this.’

Green retreated to Sears’ headquarters behind Oxford Street to lick his wounds. He fielded calls from contacts, complaining bitterly about the City’s smears. But he rebounded quickly. Storehouse, the high-street conglomerate put together by the designer Sir Terence Conran in the mid-1980s, had effectively put itself up for sale the previous year by planning to spin off Mothercare and keep its other business, BHS. The department-store chain, founded in 1928 by a group of Americans who wanted to emulate the success of Woolworths, was struggling with the introduction of cheap clothing by supermarkets like Asda and Tesco. In the six months to October 1999, BHS’s like-for-like sales fell by 9.2 per cent and it made an operating loss of £8.3 million. It had a valuable property portfolio, however, with more than 150 stores. BHS was the acquisition that would change everything and transform Green’s finances.

Storehouse held sale talks with two suitors – Brown & Jackson, the owner of Poundstretcher, run by a South African tycoon called Christo Wiese, and Iceland, the supermarket group. In March 2000, both sets of talks fell apart. With backing from Barclays and Robin Saunders from the German bank WestLB, Green pounced. He called Storehouse’s dour chairman, Alan Smith, and made him a take-it-or-leave-it offer: £200 million for BHS, and four days to think about it. Richard Caring hovered in the background during the operation, which was codenamed Project Boris, although he ‘never appeared in the front-line negotiations’, according to an adviser who was involved. Green’s purchase of BHS was announced on 27 March 2000. Touchy about his growing reputation as an asset-stripper, he emphasized his intention to run it as a going concern.

The following month, Terry Green, the Debenhams chief executive who had worked with Green on the M&S project, denied that he was taking a job at BHS. Terry Green was a beefy bruiser with a big ego and an appetite for money. He had just bought a ten-bedroom mansion near Tunbridge Wells, and he told an interviewer from Management Today that he had realized his boyhood dreams of ‘having a flash car, a sexy girlfriend and a house in the country’. It was later said that he boasted of having paid for his girlfriend’s breast implants. Terry Green saw the opportunity to take his earnings to the next level. In September 2000, despite his earlier denial, he left Debenhams to become Green’s chief executive at BHS. Two months later he was joined by Allan Leighton, the former Asda boss, who became chairman. Green offered Terry Green and Leighton respective stakes of 5 and 10 per cent in his deal.

Hiring the successful boss of Debenhams should have been a coup, yet Green enjoyed demeaning Terry Green. ‘He treated him like dirt,’ said a Green adviser who watched them together. Richard Hyman, founder of the retail analysis firm Verdict, was invited for a buffet lunch with BHS’s new owner in his office at its headquarters on Marylebone Road. Hyman observed that Terry Green, usually boastful and ebullient, sat in meek silence throughout the meal. At one point, Hyman made the mistake of suggesting that Green hadn’t been serious about his tilt at M&S and had been ‘in it for the ride’ – an unfortunate phrase, given the furore over Tina’s share buying. ‘In it for the fucking ride?’ Green roared. He got up, rummaged through the papers on his desk and produced a cheque for £6 billion from WestLB. ‘If I was in it for the ride, what the fucking hell is this?’ he demanded, waving it in Hyman’s face. Terry Green, himself a hard man who had grown up with poor parents in a terraced house in Stoke-on-Trent, seemed to be overawed by his new employer’s alpha-male swagger.

Green and his team hit BHS like a storm, working eighteen-hour days. Terry Green derided BHS’s womenswear department for buying ‘10,000 little dresses – the sort of thing Pocahontas would wear’. Green liquidated £60 million of unsold stock at ‘20 per cent, 30 per cent or 50 per cent off’. When their gruelling shifts ended on time, they decamped to Les Ambassadeurs casino on Park Lane, where Green would smoke slim-line cigarettes and hold court. Under his ownership, BHS’s profitability began to improve miraculously. In the first year, the chain’s sales fell by 1.1 per cent to £815.2 million, but it swung from a loss of £58.8 million to a pre-tax profit of £18.5 million. In the second year, sales came in at £875.1 million, but profits multiplied to £94.9 million. It was one of the most remarkable recoveries the retail industry had ever seen, and it turned Green into a hero. He gave reporters stories illustrating his attention to detail, claiming he had saved £40,000 a year by changing coat-hanger suppliers. In January 2002, Rory Godson of the Sunday Times announced that Green had ‘made the fastest billion pounds in British history’, on the basis that retail companies were valued at roughly ten times their pre-tax profits. On that measure, BHS had gone from being worth £200 million to £1 billion in less than two years.

Green pretended not to care – ‘I don’t pay any attention to all that crap,’ he told The Independent – but he obviously lapped it up. When he and Tina flew their friends to Cyprus for PG50 three months after Godson’s story, he basked in adulation. During his mock This Is Your Life presentation, Michael Aspel mentioned that Green had won personality of the year at the Retail Week awards a few weeks earlier. For the first time in his life, Green felt he was receiving the recognition he deserved. It was intoxicating. A former colleague said, ‘It wasn’t just that he was running BHS – he felt he was running the rest of the high street as well. He would go into places, buy a garment with the worst mark-down on the rail and hand it to a member of staff. He’d say, “Send it to your boss with my compliments.” It was like a Sicilian message.’

Sir Alan Sugar, who had been knighted two years earlier, had been on ‘chinwag’ terms with Green since the Tottenham Hotspur days. He remarked on the change wrought on Green’s personality by the BHS phenomenon. ‘Recently when I bumped into him at the Dorchester, I got a very regal down-your-nose look and was then ignored,’ Sugar wrote in the Evening Standard in June 2002. ‘This must be because he is worth £1.3 billion and feels he does not have to talk to anyone unless they are in the top thirty of the Sunday Times Rich List.’

Beneath the grander exterior, the insecurities stoked by his ousting from Amber Day still burned. Green harboured a particular jealousy towards Gerald Ronson, one of the ‘Guinness four’ convicted for their roles in the 1980s share-support scandal. Ronson, who insisted that he had not known his actions were illegal, emerged from prison with his head held high and rebuilt his billion-pound property business while earning respect in the Jewish community for giving generously to charity. Ronson wore double-breasted suits and disliked ‘champagne bullshit’, but every year he hosted a big lunch for his contacts, filling the Savoy hotel’s vast River Room. In 2002, the guest list included Robin Saunders. Green called Saunders on the morning of the lunch and pleaded with her not to go – presumably prompted by ego or spite. Saunders reluctantly agreed to cancel, and sent one of her managing directors in her place. She was mortified when she found out she had been seated next to Ronson himself.

The two Greens inevitably fell out. Terry Green urged his boss to move BHS upmarket and introduce designer collaborations, as he had done at Debenhams with the likes of Ozwald Boateng and Jasper Conran. Green rejected most of Terry Green’s ideas as a matter of course, especially if they involved spending money. Their relationship culminated in an infamous shouting match in Green’s office, where the two men ratcheted up the volume against each other until Green’s secretary and the whole floor could hear. In the end, Terry Green decided that his boss simply had a louder voice and gave in. He left BHS in April 2002, eighteen months after joining. Green cancelled his underling’s right to a 5 per cent stake. Terry Green realized that his contract had been drafted with a loophole in it, and decided to go without a fight.

Green had bought BHS at a time of uncertainty on the high street. The rise of discount fashion stores like New Look and Primark was putting pressure on the established middle-market retailers. A month after Green sealed his deal with Storehouse in May 2000, C&A, the second biggest player after M&S, announced that it would close all 109 of its British shops, with the loss of 4,800 jobs. Sentiment was further dampened by the bursting of the dot-com bubble, which coincided with the £571 million stock-market float of Lastminute.com. That was followed by the 9/11 terrorist attacks on New York. By the time of PG50 in March 2002, confidence had begun to stabilize. New Labour had won a decisive second election victory, and the economy was entering a long upswing that would run until the financial crisis of 2007. In November 2003, the former Sears finance director John Lovering and his business partner, Rob Templeman, took over Debenhams for £1.6 billion – a swoop that became highly controversial as they extracted £2 billion for their private equity backers while selling off the chain’s properties and squeezing its suppliers. Money was in the air and deals were there for the taking.

By late 2000, the County NatWest analyst John Richards had moved to Deutsche Bank. A few days before Christmas, he returned to his desk from a meeting and found a Post-it note on his phone asking him to call a Mr Bergs. He dialled the number for Helgi Bergs, deputy head of investment banking at Kaupthing, a small Icelandic financial firm. Bergs told Richards that one of his clients wanted to bid for Arcadia Group, the clothing retailer that had bought Sears’ womenswear brands from Green. At first, Richards thought he was joking. Arcadia was struggling, and its market value had fallen to about £90 million by November, but its American boss, John Hoerner, had been ousted in favour of Stuart Rose, a smooth-talking fashion veteran, and its share price had started to recover. Bergs’ client, Baugur, was a tiny company run by a thirty-three-year-old Icelandic entrepreneur called Jón ásgeir Jóhannesson. Intelligent but shy, with long blond hair, blue eyes and a penchant for black leather jackets, Jóhannesson seemed an unlikely buyer for one of the most significant groups on the high street.

Out of curiosity, Richards flew to Iceland to check out Baugur. He realized it held the local franchises for Arcadia brands including Topshop. He decided Jóhannesson was not the ingénue he looked. Between Christmas 2000 and May 2001, Deutsche Bank lent Baugur enough money to build a 20 per cent stake in Arcadia, whose share price continued to rise. In October 2001, Arcadia’s advisers accidentally sent a confidential fax to a fish-and-chip shop in Devon, and Arcadia was forced to confirm that it had received a takeover bid from Baugur worth £568 million. The plan foundered in early 2002 as Baugur failed to raise the financing, but it sounded an alert to other potential buyers. Green was one. On the surface, he and Stuart Rose had little in common – whereas Green liked to gamble and swear, Rose enjoyed fine wine and gardening – but both were driven men who had lost a parent early (Rose’s mother had committed suicide when he was twenty-seven). They were friends and sometimes rivals.

Green had first contacted Rose during his bid for M&S, when Rose was running Booker, a food-and-drink wholesaler. Green offered Rose a role managing M&S’s distribution network, which Rose thought was ‘about the least good fit of a job as he could have offered me’. Nonetheless, they met for what Green liked to call ‘chitty chatty bollocks’ and stayed in touch. Green’s way of congratulating Rose over his appointment at Arcadia was to call and say, ‘Have you found it?’ ‘Found what?’ Rose asked. ‘It,’ Green said. ‘The black hole. There’s a big black hole in there, son. Go and look harder.’ The accounting nasties Green predicted never materialized. As Baugur popped up on the share register and Arcadia’s stock price climbed, Green’s bantering calls became more serious. He would ask about Arcadia’s debt levels and trading, although he made sure never to compliment Rose on the unfolding turnaround.

In the summer of 2002, John Richards put Jón ásgeir Jóhannesson in touch with Green. They quickly drew up a deal whereby Jóhannesson would throw Baugur’s 20 per cent stake behind a Green takeover bid for Arcadia, in exchange for the right to buy its young-fashion brands, including Topshop and Miss Selfridge. Green would keep the middle-market chains, such as Burton and Dorothy Perkins. They dubbed the move Project Anaconda, after the snake that squeezes its prey to death. Having missed the chance to buy Arcadia when the share price was far lower, Green engaged in a round of haggling with Rose. He was relaxed enough to direct most of the action from his yacht in the Mediterranean. Arcadia’s former boss remembered, ‘Basically, the negotiation was done by me and Philip, and it was about, “OK son, how’s the business looking? Any problems, tax liabilities, lease liabilities?” He gave me a handwritten list of things he wanted to know about. I gave him a verbal reply. He didn’t really do any proper due diligence. He trusted that what he was getting was what he was getting.’

Merrill Lynch had refused to work for Green three years earlier. Suddenly, his arrival as the coming man in retail made him irresistible. The investment bank signed up as his adviser. To help with the press Green also hired Finsbury, one of the top financial PR firms. In mid-August, Green and Jóhannesson made a £690 million approach, which Arcadia’s board rejected. The news appeared almost immediately in two Sunday newspapers. At the end of August, the bidders returned with a higher offer worth £770 million, or £850 million including share options. The night before it was made public, Green called Rose and teased him by singing ‘If I Were a Rich Man’ – a reference to the £25 million bonus Rose stood to collect if he accepted the bid.

Green’s mirth evaporated the next day. At 2 p.m., Reuters flashed news that Baugur’s headquarters in Reykjavik had been raided by the Icelandic police’s fraud unit over allegations made by a disgruntled former business partner (the case would rumble on for years before it collapsed). There had already been tension in Green’s relationship with Jóhannesson. A well-placed source said that Green had made ‘a very determined effort to elbow Jón ásgeir out of the deal’ so he could control it. The raid would obviously make it impossible for Jóhannesson to buy any of the Arcadia brands. Green screamed that he could not get hold of ‘that fucking Viking cunt’, who happened to be away on a fishing trip. At 8 p.m., there was an emergency meeting at BHS’s building on Marylebone Road. Green sat fuming in the half-lit canteen, chairs stacked on the tables, his most senior bankers gathered around him. Jóhannesson’s colleagues came to the glass entrance door and sheepishly met his unblinking stare. Eventually, Green motioned to his bodyguard to let them in. As they entered, Green shouted at one of the Icelanders, ‘You have left me standing on a ladder that is getting kicked over. I wish I had never met you … So far as I know there are not that many people in Iceland. How unlucky can I be that of the four that I meet, three are under a fraud investigation?’

Peter Cummings at Halifax Bank of Scotland saved the day. He had already agreed to lend Green £700 million. Based on a single phone call, Cummings raised that to £800 million so he could cut out the Icelanders. As angry as Green was that night, Jóhannesson’s arrest turned out to be the freak event that made his career. The fraud raid was the act of God that handed him Topshop. Had the original deal gone ahead, Jóhannesson would have owned it. The following week, Green negotiated the purchase of Baugur’s 20 per cent stake in a fractious late-night meeting. At 3 a.m., he grabbed one of the Icelanders’ advisers from Deutsche Bank by the lapels and shouted, ‘If you’re going to play poker, make sure you have some fucking cards.’ He had the banker thrown out of the BHS building by his security guards. After a final ‘willy waving’ argument with Stuart Rose outside the George club in Mayfair, where Rose demanded that Arcadia’s shareholders get to keep a 4p dividend they were due, Green bought Arcadia.

Jóhannesson was left with a sour taste in his mouth. He believed that Green had promised to sell him Topshop at a later date as part of their final agreement over Baugur’s stake. In Jóhannesson’s version of events, he went to see Green with his wife and lawyer, and Green shook his wife’s hand, saying, ‘I’d never lie to a woman.’ For the next five years, as Green held onto the booming Topshop business, Jóhannesson sent him a text message on every anniversary of the conversation, asking, ‘When are we going to close the deal?’

Added to BHS, the takeover of Arcadia put Green in charge of 2,000 shops and £3 billion of sales. By the end of the summer, he really was the Emperor Nero character he had played at PG50 a few months earlier. Green told the Financial Times, ‘People talk about those like Hanson as great empire builders. But that was all done through the stock market money. I have done this as a solo artist.’ With hindsight, one of his closest advisers thought Arcadia was ‘probably one deal too far’ because ‘it got too big for one man to know everything’. A friend believed the acquisition of Topshop in particular began to change him. ‘Philip went from being a seriously underrated businessman with some interesting contacts to someone who was now mixing in the world of celebrities and wanted to be part of that world,’ he said.

Green had left his old life behind, but characters from his murky past occasionally surfaced like monsters in a bad dream. Amid all the glory, the loan shark Tony Schneider said to the Daily Mail, ‘I lent him money and he let me down. If he had asked me to his party, I wouldn’t have gone. There are many others who feel the same.’ Green told the Mail he was ‘astounded that anyone can ring you up just because they want their name in the papers’.

Green announced that he would take a break from dealmaking – ‘I cannot afford Arcadia and a divorce at the same time,’ he joked to the FT – but his hunger for the next deal soon returned. He watched as Baugur went on a spree with the £70 million profit from its stake in Arcadia, buying shares in Big Food Group – the parent company of Booker and Iceland – House of Fraser, Somerfield, Selfridges and Hamleys. Having already looked at merging BHS with Woolworths, Green flirted with takeover approaches for Safeway and Sainsbury’s. But M&S remained the ultimate prize. And it now looked tantalizingly within his reach.

In 2003, the former Sunday Times business editor Rory Godson brokered a crucial introduction. Godson had left journalism for a PR job at the investment bank Goldman Sachs. Keen to impress both his new bosses and Green, he organized a dinner at Pied à Terre, a discreet French restaurant with a Michelin star in London’s Fitzrovia. As well as Green, he invited Charles Dunstone, the co-founder of Carphone Warehouse, and Mike Sherwood, one of Goldman’s most senior bankers in Europe. There are generally two types of investment banker. M&A advisers, who deal with corporate clients, tend to be public school-educated and Savile Row-suited. Bond traders – brasher, rougher characters – wager millions (and sometimes billions) of the bank’s money on market movements. Woody, as he was known, was the consummate bond trader. He struck up an immediate rapport with Green. Like Arcadia’s new owner, Sherwood was a middle-class Londoner who presented himself as an outsider. By coincidence, his family had also lived on Bancroft Avenue in Hampstead Garden Suburb, although they did not move in until 1967, when Sherwood was two and Green would have been at Tollington grammar. After attending the fee-paying Westminster School and Manchester University, Sherwood joined Goldman and shot up the ranks, becoming a partner in 1994 before he was even thirty. Woody was entranced by Green’s market-trader patter and his billionaire status. As they became friendly, Sherwood piled on weight and began to brush his greying hair back. He even eventually hired Banana Split, the events company that had put on PG50, to organize a ‘joint 100th’ birthday party with his wife at the luxurious Hotel Cala Di Volpe in Sardinia. For Green, Sherwood provided an entrée to the most powerful investment bank in the City – one that had hitherto turned up its nose at him.

In September 2002, Roger Holmes was named M&S’s new chief executive. Holmes was a boyish former management consultant in his early forties. For a few months, Holmes and his chairman, Luc Vandevelde, enjoyed a City honeymoon. But Vandevelde showed several lapses of judgement as he launched a private equity firm on the side and took non-executive roles at Vodafone and Carrefour, the French supermarket. As the more experienced Vandevelde grew distracted, Holmes lost his way. M&S’s sapling chief executive had the misfortune to run into Green at an industry dinner at the Grosvenor House hotel on Park Lane in October 2003. A few months earlier, the compilers of the Sunday Times Rich List had estimated Green’s wealth at £1.9 billion. Holmes was walking down the stairs to the seating area when the king of the high street, who was in a boisterous mood, called out to him, ‘I was in your Oxford Street store yesterday.’ Holmes made the mistake of asking what he had thought. ‘I’ve never seen a bigger pile of shit in my life,’ Green pronounced, at a volume that ensured anyone who mattered in retail heard. According to another chief executive, Holmes ‘was so taken aback he went white and ran away to his table’. From that moment on, his authority was critically damaged.

Holmes bled further credibility in January 2004, when M&S delivered far worse Christmas trading numbers than analysts had expected. The contrast between his and Green’s fortunes was widening dramatically. Green had been the star attraction at the Sunday Times’ Christmas party that December, when journalists and bankers had queued up to congratulate him. Even David Mayhew, the aloof Cazenove stockbroker who had helped thwart his first bid for M&S in 2000, had laughed at Green’s jokes and whispered confidences into his ear with an easy, Old Etonian charm. At the end of January 2004, Green had lunch with Mike Sherwood and Goldman’s European chief, Peter Weinberg. The bankers bought his pitch. M&S was struggling, as it had been in 2000. This time, Green’s retailing prowess, apparently established through BHS and Arcadia, would make him a more believable takeover candidate. Project Mogul took shape quickly. Green’s first tilt at M&S had resembled a highwayman trying to hold up a stagecoach with a water pistol. Four years on, he armed himself with the heaviest artillery the City could provide – Goldman Sachs and Merrill Lynch, who agreed to act as his advisers. Green offered to put in up to £1 billion of his family’s money as equity. Goldman, Barclays Capital and HBOS also said that they would commit equity. A club of five banks signed up to provide billions of pounds of debt. The pieces came together within weeks.

At the end of the final advisers’ meeting before they pulled the trigger, Bob Wigley, Merrill Lynch’s European chairman, had a quiet word with Green. He said, ‘You’re fifty-two, you’re heavily overweight, you’ve had a heart bypass operation, you smoke like a chimney and you must have an income of about £190 million a year. You don’t need any stress and you certainly don’t need a job.’ Wigley questioned the wisdom of pursuing the blockbuster deal. A smile broke across Green’s face. ‘Bob, I like your thinking,’ he replied. ‘No one’s ever said that to me before. But with respect, that’s why you’re chairman of an investment bank and I’m worth two billion quid.’

In April, M&S put out another dire set of results. Having fallen from a high of 420p in May 2002 to about 245p, the shares fluttered up slightly in the following weeks amid rumours of a takeover bid and a replacement chairman for the unpopular Vandevelde. On a Friday in early May, Green called Stuart Rose, who had been taking a career break since selling Arcadia. ‘You’ve got fuck all to do,’ he said. ‘Why don’t you come over for a cup of tea?’ Rose went to BHS’s headquarters on Marylebone Road five days later. Green asked him to sign a non-disclosure agreement. When that was done, he revealed that he was planning to bid for M&S, and offered Rose a job as head of food. Rose promised to think about it, but he remembered how the domineering billionaire had reduced former high-fliers like Terry Green to gofers. A week later he called Green and said, ‘I don’t want to play.’

Unknown to Green, Rose already had good reason to believe he was in the running for one of the top jobs at M&S. Working from an office near Fitzroy Square with a few friends, he had picked up the rumour of Vandevelde’s imminent departure and started lobbying persistently for the chairmanship with the help of a PR firm, Tulchan. Little more than a week after his meeting with Green, a headhunter rang Rose to arrange a coffee with one of M&S’s non-executive directors, Kevin Lomax. They met on the morning of 27 May. Rose gave Lomax ‘both barrels’ about the company’s shortcomings. Lomax listened with interest.

That afternoon, Green telephoned Roger Holmes. He sounded strangely calm, as if he was reading from a script. ‘We’ve got something we want to put to the board,’ the tycoon said. Minutes later, Revival Acquisitions, his new company, announced its intention to bid for M&S. The share price shot up by almost 20 per cent. Rose’s phone turned red hot as Green tried to call him repeatedly, perhaps sensing that his frenemy was manoeuvring. Green knew that Rose was the one person who could plausibly defend M&S. Rose told his secretary, ‘Give him any fucking excuse – just get him off my back.’ The next morning, Rose had breakfast with more M&S board members, including Paul Myners, a corporate silverback who saw himself as the next chairman. Myners knew that Holmes was far too weak to defend a hostile takeover bid. He needed a new frontman.

On Friday lunchtime, Rose finally saw Green again. He dodged questions about M&S, but Green warned him that he would see any Rose involvement with M&S as a betrayal. ‘If I come bumper to bumper with you on Monday morning I’ll punch your headlights out,’ he threatened. In the evening, Rose drove to his country house in Suffolk. Myners called and told him the board was about to fire Holmes. Myners dispatched an investment banker with a briefcase of papers to Rose’s home so he could spend the bank holiday weekend thinking about becoming M&S’s chief executive. Simon Robey, Morgan Stanley’s star dealmaker, wandered around in the garden while Rose and two former Arcadia colleagues, Steven Sharp and Charles Wilson, looked through the business plan. Rose had dreamed of the M&S job ever since he started his career there at twenty-three, having blown his modest £3,000 inheritance in fashionable restaurants. He told Myners that he would accept. On the bank holiday Monday, he drove to M&S’s headquarters on Baker Street. Rose entered by the back to avoid the press pack gathering at the front. ‘We didn’t know you were coming,’ said the security guard, scanning his list of names. Rose raised a patrician eyebrow. ‘No, you didn’t,’ he said.

Roger Holmes and Luc Vandevelde were carrying their possessions out through the front door as Stuart Rose and his team arrived at the back. The announcement of the palace coup went out at 5 p.m. Over the course of a long weekend, M&S had given itself a fighting chance. Green was enraged. ‘You fucking dicked me over,’ he shouted at Rose down the phone.

M&S scored a second early point by raising a tripwire it had originally laid in case of a takeover bid from Tesco. A few years earlier, M&S had changed legal advisers from Freshfields to Slaughter & May, but it had kept Freshfields employed on a small strip of work involving its Per Una range because it was Tesco’s law firm. Freshfields would be ruled offside due to a conflict of interests if Tesco were to make a bid. Green happened to be using Freshfields. M&S managed to secure an injunction by raising the Per Una point, forcing Green to drop the Magic Circle firm before the war had even begun. At the same time, Green set out his opening offer of £7.5 billion for M&S, comprising cash and shares in Revival Acquisitions, which he planned to list on the stock market. Green was deploying a device known as a ‘virtual bid’. Rather than make a formal approach, which would set the clock ticking on a takeover deadline and expose him to expensive banking fees, he tabled a highly conditional and non-binding offer. In any case, Rose immediately rejected it. It was a fiery start.

The next morning, Rose was getting out of his car by the side entrance of M&S’s headquarters when he was confronted by an agitated Green, who seemed to have been waiting in a chauffeur-driven Mercedes. ‘Oi!’ Green shouted. ‘I want a fucking word with you.’ As staff crowded at the windows to watch, Green grabbed Rose by the lapels and berated him for taking the M&S job. He dialled Tina and handed the phone to Rose. Green’s wife, who had invited Rose to PG50 two years earlier, told M&S’s new boss he was a ‘cunt’. Shaken, Rose went inside and relayed what had happened to his advisers. Someone pointed out that the incident must have been captured on CCTV. It took several days to retrieve the tapes from an offsite facility. When they arrived, the twenty-minute period covering the confrontation was missing.

Green subjected M&S to a relentless shelling through the Sunday papers. In mid-June, he raised his offer to £8.4 billion. Rose rejected him again. The fight turned nastier on the weekend of 20 June. The Mail on Sunday reported that Rose had bought a block of M&S shares. It turned out that Rose had bought 100,000 a few hours after Green called to invite him for a cup of tea on 7 May. Rose insisted he had not known what Green wanted to talk about when he made the trade. It also emerged that some of Green’s friends, including Tom Hunter and the brothers David and Simon Reuben, had bought shares in April. Michael Spencer, head of the stockbroker Icap, had bought 2 million shares worth £5.5 million after having lunch with Rose in May. The City’s regulator, the Financial Services Authority, launched an investigation.

The FCA cleared all the parties involved in less than a fortnight, but the story poisoned the atmosphere. It worsened still when Rose’s mobile-phone company, O2, said that his call records seemed to have been accessed by a third party. Rose spoke to a few contacts and found that every number he had dialled since January had received a mysterious call from someone who quickly hung up. He also believed he had been followed on several occasions, and there were signs that his wife’s mail had been intercepted. As a precaution, the entire M&S team was equipped with pay-as-you-go mobiles. Green denied having hired private investigators. ‘We know where George and Harry’s Bar are without Kroll,’ he quipped, referring to two of Rose’s favourite playboy hangouts. But when M&S approached the two biggest agencies, they both cited conflicts of interest, suggesting they were already engaged on the deal. Paranoia spread. The M&S office was swept repeatedly for bugs, without any being found.

Rose issued Green and his advisers with data protection notices asking for disclosure of any information they held on him. The notices were accompanied by £10 notes to cover the cost of sending back the material. Green’s reply to Rose contained two prostitutes’ calling cards and a message, ‘Here’s a picture of the two girls that had dinner with you at Harry’s Bar a few weeks ago. I enclose the £10 which they told me to return to you.’ When he heard about the prank, Lord Stevenson, the Cambridge-educated chairman of HBOS, was incensed. His bank was helping to fund Green’s bid. He had also agreed to sit on the board of Revival Acquisitions as its senior non-executive. Stevenson had tangentially crossed paths with Green years earlier: he was the Blue Arrow board director who had blown the whistle on Tony Berry’s undisclosed £25 million loan to Peter de Savary. He had warmed to Green in the intervening period, telling acquaintances the tycoon could ‘read figures like music’. But now, without counting to ten, he stopped in the middle of Eaton Square and called Green. ‘Frankly, I can’t speak for my colleagues, but I couldn’t blame them if they pulled the financing,’ he said. Green apologized and said he wouldn’t do it again, but he couldn’t help adding, ‘Dennis, remind me to buy you a sense of humour.’

The farce signalled the beginning of the end game. Green raised his offer again – this time to 400p. It valued M&S at £9.1 billion, or £11 billion including debt. Green was now putting in £1.6 billion of equity. Goldman was committing £850 million and Barclays Capital and HBOS were contributing £550 million. Five banks were providing £8.1 billion of loans. Operation Socrates, as the project had been portentously renamed, had swollen to a mammoth size. M&S’s biggest shareholder was an American fund called Brandes. Its manager, Amelia Morris, was kingmaker. She gave Green’s enlarged offer her backing – a development many thought would force Rose to open M&S’s books to Green for scrutiny. Green rang favoured journalists and sang, ‘We’re on our way to Wembley, we’re on our way to Wembley.’ But the M&S board still insisted that 400p undervalued the company, and the pension trustees refused to meet Green. He accused their chairman, David Norgrove, of spouting ‘pious nonsense’ and treating him like ‘an ignoramus’. Norgrove, a mild-mannered former civil servant who looked like a vertical caterpillar, hit back by warning that M&S’s pension contributions might have to rise significantly if Green took over because of the amount of debt he planned to pile onto the business.

The evening before the drama reached its climax, tempers frayed spectacularly in a bizarre incident at the Dorchester. Jeff Randall, the BBC’s business editor, and Will Lewis, business editor of the Sunday Times, were waiting to have dinner with the tycoon in the hotel’s restaurant. As Green walked in, unclasping his mobile from his ear and promising to tell them about a ‘late twist’, a voice cried out from another table, ‘So now we know! Philip Green and Jeff Randall – ah ha!’ Green muttered to Randall, ‘It’s that fat cunt Lord Soames.’ And indeed it was: Nicholas Soames, the Tory trencherman and then shadow defence secretary, was chuckling away with two dinner companions, his face full and red. ‘So that’s why the BBC coverage is like it is – nice cosy chats,’ Soames guffawed. ‘Ho ho ho! We’ll all be able to see your coverage now, won’t we? Their kind keep it all together, as ever.’

Green took this last remark to be an anti-Semitic slur, although neither Randall nor Lewis was Jewish. Soames afterwards strongly denied there had been any such colouring to his comments, and insisted that ‘nobody said anything remotely offensive’. But Randall was already highly sensitive about his friendship with Green. A year earlier, Private Eye had described it as ‘one of the cosiest relationships between a BBC journalist and a businessman ever seen’. Randall called Lord Maurice Saatchi, joint chairman of the Conservative Party, and complained that Soames had ‘impugned the integrity of the BBC in a very public place’. Soames reportedly contacted Randall the next morning to apologize.

Despite all the heat, Green had not actually tabled a proper bid for M&S. He had merely stated his intention to bid. He was trying to carry out what is known in the City as a ‘bear hug’, where a predator dangles a price in front of a company’s shareholders, hoping they will put pressure on the management and squeeze them into consenting. Claiming the backing of a third of M&S’s share register, which had become crowded with sharp-toothed American hedge funds hungry for a deal, Green ordered the board to open the company’s books so he could formalize an offer. The siege came to a head on 14 July, the day of M&S’s annual shareholder meeting at the Royal Festival Hall on the South Bank. Rose put on a confident performance, promising to give investors a £2.3 billion windfall if they kept the company independent. As evening fell, Green and his bankers anxiously strafed the M&S camp with calls, hoping for a change in the board’s position. Perhaps because of his strange obsession with the City, Green placed disproportionate confidence in the views of David Mayhew, M&S’s impeccably upper-crust broker at Cazenove. In fact, Mayhew had been sidelined for most of the takeover, and he was fishing in Scotland when Green called. Mayhew gave a cryptic and unhelpful response.

Green had no idea how close he came to winning. Andrew Grant, the boss of Tulchan, M&S’s PR firm, was horrified to arrive halfway through a crunch board meeting at 6 p.m. to find two different press releases waiting – one of them announcing M&S’s surrender. Some members of the board, including Rose’s right-hand man, Charles Wilson, felt it was impossible to keep holding out at 400p. At that moment, Grant received a call from Kate Rankine, the Daily Telegraph’s deputy City editor. Rose instructed Grant to fob her off by saying there was no change in the board’s stance. Rankine, who was close to both Green and Rose, called Green and relayed the update. The M&S board continued to debate the position fiercely. At 8.30 p.m., Robert Swannell, one of M&S’s bankers, looked at his BlackBerry and announced in a surprised baritone, ‘It’s all academic now.’ Green had withdrawn. The message from Rankine seemed to have been the final ingredient that made him lose his nerve. Like that, Green’s dream of assuming Simon Marks and Israel Sieff’s great mantle slipped through his fingers.

The king of the high street was anything but magnanimous in defeat. ‘I expected to be treated with an element of respect,’ he ranted to the Sunday Times. ‘It was very, very shabby. I was treated like someone waiting for a taxi.’ He blasted the M&S board for ‘continually mucking me about’ and branded Paul Myners, M&S’s chairman, an ‘anti-Semitic left-winger’. Myners pleaded guilty to the left-wing charge but threatened to sue for defamation on the first point, prompting an unreserved apology from Green. A few months later at a cocktail party, Green cornered David Norgrove, the M&S pension trustees’ chairman who had helped scupper the bid. Green arrived on bullish and defiant form. He took Norgrove by the lapel with one hand and jabbed a finger into his chest with the other, bellowing, ‘Your behaviour was disgraceful!’ At the same party, he was introduced to Maurice Helfgott, M&S’s outgoing director of clothing. By that point, he had loosened up and slipped into a jokier mood. ‘I’m going to take you lot to the cleaners,’ Green promised. Then he mischievously recited the opening words of the Kaddish, the Jewish prayer for the dead, to amusement from Helfgott and the crowd around him.

Green’s scattergun apportionment of blame was met with scepticism from some of his closest advisers. ‘He simply bottled it,’ said one. The tycoon had come under pressure from Tina and their teenage daughter, Chloe, who had both called Rose during the siege to accuse him of making Green ill by refusing to sell him M&S. Chloe had rung her father, sobbing, ‘Dad, you promised you wouldn’t buy anything else. You said you were busy enough. Why do you want another business?’ There was a funereal post-deal dinner at the Dorchester. Green served Château Cos d’Estournel claret. Bankers from Goldman Sachs and Merrill Lynch took it in turns to say through gritted teeth what a privilege it had been to work with him. Richard Sharp, Goldman’s head of private equity, introduced a dose of reality. ‘We lost,’ he said, despondently. ‘We didn’t fucking lose,’ Green snapped. The embarrassment of Green’s behaviour during the M&S battle caused deep recriminations inside Goldman. It contributed to the departure of one of its most senior bankers, Simon Robertson, who felt that Goldman’s brand was being tarnished by Mike Sherwood and his unbiddable client.

Stuart Rose sent a case of Château Cheval Blanc to BHS’s headquarters as an olive branch. Green gave Rose a clock from the jeweller Asprey – a pointed joke about the amount of time he would have to spend in the office turning M&S around. Rose liked to quip that Green had planted a bug inside. During board meetings he would order colleagues, ‘Speak up – PG can’t hear you.’ Green told Rose the dirty tricks of the preceding months had been nothing more than ‘the normal bing bang bosh’ of a takeover battle. The two retailers kept up a playful rivalry. Green would call Rose and complain about M&S’s products (‘I’ve been eating your chicken breasts every lunchtime for the last ten years and they’ve gone dry’). Rose would sometimes admit that he had a point.

A year after the M&S affair, Green had a cake made for Rose’s birthday, which coincided with the Retail Week industry awards. It was topped with an edible Rose figurine wearing a brown T-shirt mocking the various initiatives he had implemented since settling in as chief executive. It said, ‘Green/Ethical/Fairtrade/Won’t leave a bitter taste/There’s nothing woolly about us/Got you hook, line and sinker/Don’t get caught.’ The front read, ‘Happy birthday Stuart. £3.50 or two for £5.’ When he was sure that plenty of people were watching, Green made a point of plunging the serving knife deep into the Rose figurine’s back.

On the second anniversary of Green’s withdrawal, the M&S defence team held a reunion dinner at Harry’s Bar in Mayfair. The Citigroup banker Robert Swannell gave out M&S wallets containing four £1 notes as a memento of Green’s 400p-a-share offer. After the main course, Rose announced another present. Green entered in a spirit of bonhomie, the hostilities of the campaign gone. As they sipped coffee, Nigel Boardman, the Slaughter & May lawyer who had tripped up Freshfields, asked Green why he had given in. Green, who must have been in an unusually candid mood, said he had not wanted to risk so much of his family’s money.

In the immediate aftermath of M&S, Green turned to Arcadia for consolation. He had repeated the BHS formula, attacking the cost base, moving to cheaper suppliers and mortgaging the Oxford Street flagship store to pay down the acquisition debt as quickly as possible. It was a frenetic period. Someone who worked with him closely said, ‘You could get your first call from Philip just before 6 a.m. and your last call just before 1 a.m. His attention to detail was formidable. It was as tough as I’ve ever worked.’ At BHS, Green had repaid his loans to Barclays and WestLB within two years. In October 2004, three months after his failure to buy M&S, he announced that the entire £808 million provided by HBOS for Arcadia had been settled. With ‘Ain’t No Mountain High Enough’ pounding from the speakers, Green told his senior staff that Arcadia’s operating profits had more than doubled in two years, despite barely any movement in its £1.7 billion of sales. Tina, standing at the front of the crowd, dabbed away a tear. Next to her was HBOS’s Peter Cummings, Green’s favourite banker. As with BHS, Green was lauded as a genius who had changed the paradigm of retailing.

Green’s estimated wealth soared from £1.9 billion in 2003 to £3.6 billion in 2004 and £4.9 billion in 2005 as the perceived values of BHS and Arcadia ballooned. In 2005, Arcadia’s owner reloaded the balance sheet with debt and paid his wife a £1.2 billion tax-free dividend in Monaco. A further £100 million of dividends were sent to minority investors, such as HBOS, which owned 7 per cent. It was the biggest payday in British history, and it was the superlative answer to the grey suits he believed had denied him M&S. An old friend thought it was also his way of flicking the middle finger at his loathed rival, the property developer Gerald Ronson, who was a mere multimillionaire. Green had risked just £9.2 million of his own equity in the original Arcadia deal. The dividend represented 130 times his investment, and it propelled the Greens into the top tier of the global super-rich. In May 2005, they flew 300 guests to the south of France for the bar mitzvah of their son, Brandon. The party at the Grand-Hôtel du Cap-Ferrat cost £4 million. The tenor Andrea Bocelli performed on the first night. Beyoncé played on the second evening. At the end of the ceremony in a pop-up synagogue, Brandon sang in uninterrupted Hebrew for fifteen minutes. A business contact whispered to Green that he must be very proud. ‘Why, what’s he ever done?’ the tycoon retorted. ‘I paid for all this.’

With his increasing prominence, Green exercised unrivalled power over the media. A partygoer who attended Brandon’s bar mitzvah tried to sell a DVD of the event to the News of the World, the now-defunct Sunday tabloid. Instead of running it as an exclusive, as it would have done with most other celebrities, the paper couriered the disc straight to Green’s office so he could have it destroyed. The source never received the £5,000 he was promised because the contract had been carefully worded to stipulate payment only after publication. A little while later, the Daily Telegraph, which had recently been bought by Green’s friends Sir David and Sir Frederick Barclay, squashed a readers’ poll that voted BHS the most unpopular chain on the high street. The unprecedented deference shown to Green only encouraged his innate control freakery.

The Greens took delivery of Lionheart, a new 210ft superyacht with six bedrooms, a gym and a hammam, at the end of 2005. At around the same time, they moved from Le Formentor to a penthouse flat in Le Roccabella, a tower near the infamous nightclub Jimmy’z on Monaco’s eastern fringe.

It was a time of uncontrolled bloating for Green’s ego and spending. One of his oldest friends, who stopped attending Green’s parties after his fiftieth in Cyprus, thought the £1.2 billion dividend ‘destroyed him in more ways than have ever been analysed’. He said, ‘It destroyed his judgement, his humanity and in some respects his soul. It did something to him.’ There was the obvious external effect. The sheer amount of cash now at his disposal made people treat him differently. The Greens’ deposits in Barclays and HSBC put them among the banks’ top customers in the world, and they were lavished with attention. ‘He became a very big money tree,’ his friend observed. ‘Under all money trees there are lots of people sitting there hoping to catch a few things, and he surrounded himself with those kinds of people.’

Then there was the internal effect, which was less immediately obvious but possibly more damaging. Green had grown up without a father. In the past he had taken advice from male friends such as Morris Keston, the Tottenham Hotspur superfan, and Kenny Tibber, the job buyer. After his big payday, he gradually stopped listening. ‘Subconsciously, he started to go down the route of being someone who said, “I’ve got a billion pounds, what have you got?” ’ his old friend said. ‘It pushed him beyond the point where he felt he had to take the views of dissenters seriously.’ With Green’s mother playing less of a role, Tina ‘fanned the flames’ of his greed. The friend added, ‘No one I’ve ever met has worshipped at the temple of Mammon so assiduously. It was about conspicuous consumption, about spending the money and making sure everyone knew you were spending it in excessive and vulgar ways.’

In 2007, Tina asked the events company Banana Split to top the PG50 party. PG55 cost an estimated £20 million and took place on a private island in the Maldives. So many private jets parked at Malé airport that latecomers were told there was only enough landing space to drop off passengers. Tina ordered 3,000 bottles of champagne and had a giant granite Buddha built for a Balinese-themed party, which was said to have upset some of the Muslim labourers. There was live music from Gladys Knight & the Pips, George Michael, Jennifer Lopez and Ricky Martin. Green and his friends sprayed champagne around on the beach. The inflation in his birthday celebrations could be measured easily. Guests at PG50 had been given a single souvenir DVD of the event. Guests at PG55 went home with a four-disc box set. The opening segment of the first DVD was modestly titled, ‘In The Beginning’.