Despite a drop in operating profit of 8.1 percent to £300.6 for the year ended 2 September, retail tycoon Sir Philip Green remains upbeat about Arcadia Group’s performance. “Our operating margin at 16.7 percent is still among the best in the industry,” he said. Group sales rose 1.8 percent to £1.8 billion, while like-for-like sales dropped 1.9 percent. Pre-tax profits fell £24.3 million to £357.5 million. Green maintained the results were buoyant despite a challenging retail climate. “This represents a strong performance when set against a competitive retail market, significant investment in new space by our competitors, and underlying costs inflation for retailers.” Richard Ratner, analyst at Seymour Pierce, said that the result was “pretty decent given the environment.”
The group opened 46 new outlets during the year. Green said capital investment, including new stores, refurbishments and e-commerce, had increased from £65 million to £123 million during the year. He added that the company had already committed £30 million of capital investment this year.
The group’s top performers were menswear chain Topman and Wallis, with Arcadia ‘s best known brand Topshop continuing to give a strong performance. Arcadia recently announced the resignation of Jane Shepherdson, brand manager for Topshop. Shepherdson was credited with turning the brand into one of the most coveted labels on the high street. At the time, both Green and Shepherdson did their best to blast the rumours that her departure had anything to do with the signing of supermodel Kate Moss to co-develop a line for Topshop. Meanwhile, the Miss Selfridge chain suffered a loss of £3 million and last month, department store Bhs reported that profits for the year to May had almost halved, while sales dipped 1.8 percent to £860.5 million.
This year Green will be waiving a dividend pay-out. Last year, he paid his wife a dividend pay-out of £1.2 billion, after Arcadia outperformed the market.
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