Arcadia owner Taveta suffered plunging profits last year amid a tough fashion market, which saw sales fall.

Operating profits were down 42%, sinking from £215.2m to £124.1m.

Total sales fell 5.6% to £1.9bn in the year to August 26, 2017. Digital sales rose 11.5%.

The business upped its levels of investment, ploughing £124.9m into the business, compared to £97.8m the year before, but ended the year with less cash than in the previous year. Net cash amounted to £157.2m, down from £223.1m.

Arcadia chief executive Ian Grabiner said: “The retail environment remains highly competitive and challenging.

“While we have found headline sales and profits disappointing, we remain a strongly cash-generative business.

“The increase in digital sales is taking place at the expense of traditional ‘bricks and mortar’ retailing, as consumers embrace the opportunity to purchase across all the channels available to them.

He added: “We look to be as efficient as we can be given the challenging retail environment.”

Arcadia added that it was in the process of developing a new ‘state-of-the-art’ 1 million sq ft distribution centre, which is due to open next year.

Arcadia’s various brands, which include Topshop, Topman, Dorothy Perkins, Burton and Miss Selfridge, are known to have been struggling amid increased competition in the fast fashion space.

Etailers such as Asos, Boohoo and Missguided have impinged on its traditional customer base.