Arcadia to close 10% of stores
25 November 2011 10:05
Top Shop and BHS owner Sir Philip Green has warned around 10% of his retail empire faces closure. The owner of Arcadia Group, which has 2,507 stores across its brands, said approximately 250 stores would not have their leases renewed when they expire within the next three years.
The warning came as Sir Philip revealed a near 40% slide in underlying pre-tax profits to £133.1 million as his chains, which also include Burton, Evans and Miss Selfridge, chose not to pass on increasing costs to customers.
Chris Beauchamp, market analyst at IG Index, said: "Store group Arcadia reminds everyone that the British consumer is still generally AWOL, with no likelihood of a quick return."
Sir Philip said the company, which reported a 1.8% decline in like-for-like sales including VAT in the period, saw margins squeezed as it took a £53 million hit to absorb price increases.
Elsewhere, the company posted a bottom-line loss of £120 million after writing down the value of "certain onerous leases" across the estate due to the economic conditions - which are likely to be the stores facing closure.
Arcadia said young fashion brands - such as Top Shop, Top Man and Miss Selfridge - were trading positively but the wider group saw a 4.4% decline in like-for-like sales in the first 12 weeks of the new financial year.
But Sir Philip, whose family ranks 13th on the 2011 Sunday Times UK rich list with an estimated fortune of £4.2 billion, said the unseasonal weather in October and November was partly behind the weaker trade.
Arcadia said it would continue to invest in its brands after investment of £113 million in the year to August.
The company also has an international business with 600 franchised outlets in 36 countries - 21 of which opened in the last year. Arcadia will open its third US store in Las Vegas next year.
Retail news is updated every weekday and is provided courtesy of: 
