Former BHS owner Chappell says the £2.6 million took out of the company is a 'drip in the ocean'
The former owner of failed High Street retailer BHS has described the £2.6m he took out of the company as a “drip in the ocean”. In his first interview, Dominic Chappell told BBC Newsnight he apologised “sincerely and utterly” to the chain’s 11,000 staff.
Mr Chappell bought BHS’s 163 stores from retail tycoon Sir Philip Green for £1 in March 2015. Mr Chappell said the plight of the staff “plays on” him deeply.
But, he said, had he not become involved the chain would have gone into liquidation far sooner. A spokesman for Sir Philip denied that claim.
Mr Chappell confirmed that he had received £2.6m in payments during his ownership, but defended that income as fair. “I took a big risk going in,” he said.
“We live in a risk reward society – that’s the way companies are built and fail. Did I take a lot of money out? Yes I did. But did the business fail because of the amount of money I took out? No it didn’t.
“This was just a drip in the ocean compared to the money that was needed to turn around BHS.”
His salary of more than £600,000 was, he said, established by an independent committee.
Mr Chappell blamed Sir Philip Green for the eventual demise of the business, saying the Arcadia owner had “tipped it over the edge”, but he had heavy criticism, too, for Frank Field, the politician leading the inquiry into why BHS failed.
Mr Chappell branded the Labour MP “pathetic”.
He also said that he came very near to completing a deal to pass BHS on to the Sports Direct owner Mike Ashley, at one point handing over the ownership certificate, only for the purchase to fail.
It is less than a year-and-a-half since BHS was bought for £1 by Retail Acquisitions, a company specially created for the deal and 90% owned by Mr Chappell.
Barely a year after that deal had gone through, BHS went into administration and the group is now in the final stages of being wound up.
The question of who should carry the blame for the collapse of the retailer is the subject of a number of different inquiries, including one led by MPs.
And much of the focus has fallen upon two men – the retail billionaire Sir Philip Green, who owned BHS for 15 years, and Mr Chappell.
‘Sunday league retailer’
Mr Chappell, who had no experience of retail when he bought the business, has been described as a “Sunday league retailer”, “a chancer” and a “Walter Mitty” fantasist by politicians.
He told BBC Newsnight that he made no secret of his lack of retail experience, saying “Sunday League retailer” was a fair description, but said he was an expert in turnarounds, which made him a suitable owner.
“We took a chance on BHS. We were the only people to stick our heads above the parapet and give it a go. Otherwise Sir Philip would have liquidated the company and thousands of people would have lost their jobs straight away. We did everything we could to save the company.
“We were the only people who were prepared to take that risk to try to get it to break even, to try to make a profit. So if that makes me a chancer, well yes I am.”
‘Fingers in the till’
He laughed off suggestions that he had threatened to kill chief executive Darren Topp, saying he had merely said he would “sort him out”, but confirmed he had intended to fire Mr Topp from his job.
Mr Topp has subsequently been very critical of Mr Chappell’s ownership of the retailer saying “he had his fingers in the till”.
Mr Chappell defended his decision to use company funds to pay for a £1.5m loan to his father, saying “it had no impact whatsoever on BHS – and yes, I needed to help my parents, which I did”.
He also described as “absolute nonsense” claims that he tried to use company funds to pay for holiday flights.
As for Sir Philip, Mr Chappell told the BBC the pair’s working relationship had started well but then deteriorated.
He told the BBC: “Philip has been in BHS for one thing only, and that was to extract as much money as possible, which he did within the first couple of years.”
He said he was shocked by the dilapidated state of some of the BHS stores, blaming Sir Philip for failing to invest in the company.
“He put very little investment into BHS,” said Mr Chappell. “You only need to go and look at some of the stores that were in terrible condition. I went with my team to 50 to 60 of the stores in the first year.
“Some of them didn’t have air-conditioning or heating. Some had water pouring through the roof, some had two or three floors closed that had been closed for two or three years because they were hazardous, asbestos, God knows what else.
“He did not invest money back into the business as he should’ve done.”
Mr Chappell said his own reputation had been “absolutely destroyed” by the failure of BHS.
“We had some very, very big problems all the way through and we had the tide against us all the way. There was not one day that went past when we had some luck on our side. But we didn’t just walk in, rip the guts out, and walk out again.”
As for his own future he says he’s expecting “a very very difficult period”.
“I think corporately it’s going to be hard for me to slot back into another business although, believe it or not, I have been offered two or three other positions in major retailers over the last couple of weeks, so who knows?”