Arcadia-owned Topshop has swung to a full-year loss following a sharp drop in sales and impairment charges on its property.
The fast fashion chain suffered a pre-tax loss of £10.9m for the year to August 26, 2017, according to accounts filed at Companies’ House. This marks a sharp downturn from profits of £59.4m it posted the year before.
Impairments on fixed assets and lease provisions took a £12.6m bite out of its bottom line.
The accounts also revealed that Topshop significantly increased its provsion for new loss-making stores to £4.2m from £730,000.
Retailers make provisions for onerous leases when the cost of a lease is no longer covered by the income of the store.
Topshop’s losses come a week after Arcadia parent company Taveta Investments posted a 42% slump in annual profits.
Taveta’s total sales slid 5.6% to £1.91bn, compounded by a £29m fixed asset impairments charge.
Arcadia Group chairman Sir Philip Green has recently denied rumours of a potential sale of the business to Chinese textiles business Shandong Ruyi.
Last year, former Burberry exec Paul Price was brought into head up the Topshop business and engineer a strategy to turn around performance.