Green warns retailers: no oil wells under Oxford St

Retail billionaire Philip Green has warned that the bidding frenzy consuming the sector is creating fool's gold.

He said that the operation of retail businesses was still key and the appetite for take-private deals could mean some businesses become over-valued.

'For the past three years, people (seem to) think there's an oil well under every shop on the high street,' said Green.

'None of these deals have got done yet and it will be interesting to see, if one gets done at the wrong price, what happens.'

Speaking at the Barclays Retail Industry Forum, Green added: 'There are no oil wells under Oxford Street - you've got to get customers through the front door.'

The entrepreneur, who said he devotes 60 per cent of his personal time to product, celebrates his first birthday as the owner of Arcadia this week. He plans to announce results for the seven brands, now run as separate enterprises under its umbrella, on October 23.

Green railed against City short-termism, which forces businesses to spend unnecessary capital chasing growth. 'People don't spend long enough looking at the business they've got,' he said. 'The more branches you open, you start eating yourself.'

Whether Green bids for Safeway is likely to depend on the offer tabled by Morrison's, but he indicated he would 'never take unnecessary risks', because he is committed to the 40,000 people he already employs.

'Can I do it again?' he mused. 'All the fundamentals will have to be absolutely right to make the next acquisition - we'll have to wait and see.'