Billionaire Sir Philip Green’s Bhs chain will be debt free by Christmas and the tycoon insisted it is not for sale.

Green said he had been unaffected by the credit crunch that has led banks to tighten lending terms. In the last financial year, Bhs almost halved bank debt from£115.2 million to£61.8 million. “By Christmas, we’ll have no debt. We’ve got plenty of flexibility,” he told Retail Week.

Bhs posted a 3 per cent rise in operating profits to£50 million on sales up 1.4 per cent to£872.5 million for the year to March 31. Green dismissed speculation about a possible disposal. “I’m not selling it, I’m fixing it,” he said.

He took a more hands-on role at Bhs last year after profits plunged. He said the “small improvement” over the period was reflective of a return to traditional strengths. “We recognised we’d got it wrong and we got back to what we’re good at – premium value,” he said.

Earlier mistakes in the core womenswear offer have been addressed. Green said: “It’s better product, better merchandised, more co-ordinated and more fashionable, but not high fashion.”

Bhs is in the middle of a£100 million refurbishment programme and 19 shops have been overhauled since the beginning of the year. The project will be accelerated, assuming final quarter trading meets expectations. Refurbished shops are outperforming the rest by 12 per cent.

Like-for-likes fell 1.5 per cent last year. Like other retailers, Green said he suffered during the “crap” summer. Same-store sales were flat from the year-end, but in the past six weeks rose 3 per cent.

The entrepreneur, who is recruiting a chief executive for Bhs, said it was too early to forecast how Christmas would play out.

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