Arcadia profits back in the black
23 October 2009 09:21
Sir Philip Green's Arcadia returned to annual profits yesterday, despite "one of the most challenging retail landscapes that I have seen" according to the retail entrepreneur.
The retail empire owns Miss Selfridge, Wallis, Burton, Topshop and Dorothy Perkins as well as Sir Philip's department store brand Bhs, which was integrated into the Arcadia brand in July.
In the year ended August 29th posted a 13% rise in pre-tax profits to £213.6 million, marking a turnaround in performance after profits declined in the previous two years by 5% and 1.6% respectively.
Total sales were up 2.7% at £1.9 billion, with overall UK like-for-like sales remaining flat on last year.
However, the company said that improving conditions recently meant that comparable sales were up 2.3% in the seven weeks since its year-end.
Commenting on the results, Sir Philip said: "The Arcadia group and all the people working in it can be proud of these results. An excellent understanding of the market place and of our different brands has combined to provide our customers with great product and an exciting store and online shopping environment. I believe the focus on operational efficiency, managing our costs and cash, together with the ability of our global supply chain, will enable the business to continue to grow.
"Once again, our leading fashion brands Topshop, Topman and Miss Selfridge have had an excellent year, producing record turnover and profit. The Topshop and Topman teams also successfully delivered our first American store in Soho, New York in April of this year".
Sir Philip went on to caution that the sector would face further challenges ahead of the Government's planned New Year reversal of the VAT decrease from 17.5% to 15%.
He said: "In respect of the year ahead, I remain optimistic but cautious as I believe the market will remain challenging and price sensitive. The VAT increase, unemployment and a general election will all impact upon the market".
He went on to say that the current date was "right in the middle of when we have a skeleton staff and a sale - it will upset both retailers and the consumer".
"We should wait until the end of season or end of January."
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