Private equity firms are taking home billions of pounds as high streets die and thousands are unemployed.
#Dispatches studied the accounts of 10 well known brands including HMV, Cath Kidston, Debenhams, and Toys ‘R’ Us, that entered administration in the past three years. 1/
#Dispatches studied the accounts of 10 well known brands including HMV, Cath Kidston, Debenhams, and Toys ‘R’ Us, that entered administration in the past three years. 1/
Nearly 29,000 jobs were lost, but we can reveal that across their broader investment portfolios, the private equity owners disclosed nearly a billion pounds of profit during the period of ownership. The 10 brands owed almost £50million in unpaid taxes when they collapsed. 2/
“Things stopped being replaced. They would break down. There was water coming through the ceiling.”
Former employees of Debenhams, bought in 2003 by a private equity consortium, told #Dispatches that after the takeover the business underinvested in the upkeep of its stores. 3/
Former employees of Debenhams, bought in 2003 by a private equity consortium, told #Dispatches that after the takeover the business underinvested in the upkeep of its stores. 3/
The new owners decided to sell 23 Debenhams sites, forcing the stores to pay to rent them back from new landlords.
The new owners reportedly paid themselves £1.3bn in dividends. They then sold off the company in 2006, leaving Debenhams with a huge rent bill & massive debt. 4/
The new owners reportedly paid themselves £1.3bn in dividends. They then sold off the company in 2006, leaving Debenhams with a huge rent bill & massive debt. 4/
The Chief Executive at the time Rob Templeman was paid almost £8m during his time at the company.
He told #Dispatches: RTR 5/
He told #Dispatches: RTR 5/
But the taxpayer is also paying the price, #Dispatches can reveal.
We studied the accounts of 10 well-known high street brands that went under in the past three years. Together they owed almost £50m to HMRC. 7/
We studied the accounts of 10 well-known high street brands that went under in the past three years. Together they owed almost £50m to HMRC. 7/
.@Uni_of_Essex’s Lord Prem Sikka told us that the taxpayer bears the loss for unpaid taxes & that private equity firms do not generally suffer to the same extent as they are secured creditors & can extract returns during their ownership of the business. 8/
Phones4U founder John Caudwell, who sold his business to private equity for £1.5bn, defends the “absolutely vital” private equity industry, but says:
“Some way of making private equity keep more skin in the game, keep the business protected would be a good thing.” 9/
“Some way of making private equity keep more skin in the game, keep the business protected would be a good thing.” 9/
WATCH: The High Street Cash Crisis. Now on @Channel4
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