Philip Day: the retail knight falls off his horse

In recent years, the billionaire proprietor of Edinburgh Woollen Mill, Philip Day, has basked in the glow of a burgeoning reputation as a saviour of the British high street. “The opposite” of the sector’s stereotypical “brash entrepreneur”, Day is “quietly showing his retail rivals the way”, said The Guardian in 2018. Having quietly built a 1,113-store powerhouse from formerly stricken fashion chains such as Jaeger, Austin Reed, Peacocks and Bonmarché, his star is in the ascendant even as the curtain falls on Sir Philip Green’s troubled Arcadia empire. “As one billionaire Philip fades into the background another is hoving into view.”

From council estate to castle

Eighteen months and a pandemic later, a new, rather less flattering picture of the Lancashire-born tycoon’s operation is emerging. As it battles the current “brutal” economic environment, Edinburgh Woollen Mill is alleged to have resorted to tactics that “are pushing suppliers both at home and overseas to the brink” – notably, refusing to honour orders, says Sam Chambers in The Sunday Times. Partners claim their “pleas for help” have been met with what one called “monastic silence”, raising questions over the health of Day’s empire.

Day keeps a low profile. But he has certainly come a long way from his childhood roots on a Stockport council estate. These days, notes The Independent, he “owns a castle in Carlisle”, but “officially lives in Switzerland and spends a lot of his time in Dubai”, where his acquisition company, Spectre, is registered. “He reportedly bought his first helicopter from Sports Direct tycoon Mike Ashley.”

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Born in 1965, Day once observed that on leaving school (having reportedly turned down a place at university) he saw three career options, says The Sunday Times: “the mines, the army, or industry”. Choosing the latter, he joined textiles giant Coats Viyella, which gave him a useful insight into how the fashion supply chain worked. At 28, he was headhunted by the upmarket clothing brand,Aquascutum, rising to become joint managing director within five years, says The Guardian. Then, in 2001, he seized his chance to build his own retail entity. Teaming up with private-equity firm Rutland Partners, he bought the Edinburgh Woollen Mill chain for £55m and succeeded in transforming “one of the fustiest brands on the high street” into a mecca for tourists, who snapped up its tartan scarves, shortbread and Scottish knits – no matter that many of them had actually been made in Mongolia.

A taste for scavenging

Over the past decade, Day – who paid himself a £16m dividend last year – has developed “a taste for scavenging”, snapping up ailing chains from administration. Critics accuse him of asset-stripping and using “financial engineering” to turn a profit from failing brands while using insolvency laws to his advantage, says The Independent. Most recently, his takeover of Bonmarché raised eyebrows. Just months after being acquired by Day in “an unusual takeover battle” last summer, the struggling womenswear retailer called in the administrators, blaming “Brexit uncertainty” for some of its woes, says the FT. The pandemic is posing similar challenges for the man once described as “the knight in a comfy cardie”. We may soon get a better idea of how close to reality that cosy image really is.