Retail tycoon Sir Philip Green is facing questions from MPs over his reported plan to sell the Arcadia business to a Chinese textile company.
Green is said to be looking to sell Arcadia, the owner of high street brands TopShop, Dorothy Perkins and Miss Selfridge, as bricks and mortar retailers come under pressure from fast-growing online rivals such as ASOS plc (LON:ASC).
Jining-based Shandong Ruyi, which controls British clothing brand Aquascutum and owns a 51% stake in Trinity Listed, has held initial talks about a proposed acquisition of Arcadia, the Sunday Times reported.
MP wants to avoid repeat of BHS scandal
But Frank Field, the Labour MPs who led the parliamentary investigation into Green’s disposal of loss-making BHS, said he is writing to Arcadia and the pensions regulator with questions about the possible sale of the business.
Field and Green have butted heads in the past over BHS. Green threatened to sue the Labour MP on multiple occasions, accusing him of running a "kangaroo court" in his search for answers about BHS.
Green washed his hands of BHS in 2015, selling the fashion and homewares chain to Dominic Chappell, formerly bankrupt with no retail experience, for £1.
A year later, BHS collapsed with the loss of 11,000 jobs and a pension deficit of as much as £571mln.
Arcadia in pension deficit
Field wants to avoid a repeat of the BHS scandal and said he will ask for assurances that Arcadia’s pensioners won’t be affected in any sale of the business.
“The committee will be writing to try to ascertain how this might affect the pension funds because they are in deficit,” Field told The Daily Telegraph.
“There is a repayment plan in operation. What is going to be promised to the pensioners if there is a sale?”
Arcadia’s pension deficit stands at around £1bn on a buyout basis or £565mln on an ongoing basis, according to estimates published last year by MPs.
Retail experts have estimated that a sale of Arcadia could fetch just £500mln given the potential cost of overhauling its store estate.