Arcadia has revealed full-year sales and profits edged up but owner Sir Philip Green admitted “these are very tough times”.
The fashion group, which owns retailers including Topshop, Miss Selfridge and Dorothy Perkins, revealed that in the year to August 31 underlying pre-tax profit before exceptional items was £167.8m, up 0.5% from £166.9m the previous year.
The group recorded profit before tax and after exceptional items of £481m, which incorporates the sale of a 25% share in Topshop and Topman to Leonard Green and Partners earlier this year.
Total sales jumped to £2.74bn, up 2% against £2.68bn the prior year. But like-for-like sales slipped 2.7%. Retail margins jumped 1.2 percentage points.
Green said: “We are very pleased to report strong cash generation from the underlying business of £325m, despite the ongoing challenging global economic conditions.”
He revealed that in the first 10 weeks of the new financial year like-for-like sales had fallen 3.7% because of the “unseasonably mild and wet weather”.
He added: “These are very tough times. Trading conditions remain challenging, therefore exciting and engaging our customer across multichannels is at the top of our agenda. Product handwriting, quality and value continue to be more important than ever.”
Arcadia invested £87m in the business, up on the £79.2m invested in 2012. It means that since Green acquired the business in 2002 it has invested more than £1.1bn.
In the year the group’s franchise business opened 127 new stores, 50 of which were Topshop or Topman, taking the total to 659 franchised shops in 42 countries. Arcadia plans to open another 161 new stores this financial year “with several further markets under discussion”, Green said. He added that more Topshop and Topman stores are being planned for the US.
Green said: “It is our intention to continue to drive overseas expansion through both owned, concession and franchise stores and through our international online business in the year ahead.
“We continue to be active with our UK portfolio, creating new and exciting concepts where there are strategic opportunities to do so. All brands have benefited from both refurbishments and new store concepts during the last year with some good results.
“We are now in the process of selecting a group of stores from all brands to upgrade and refurbish in the next six months.”