Arcadia, the parent company of high street mainstays Top Shop and British Home Stores (BHS) has reported a 38 per cent drop in profits and has announced that it will shut up to 260 stores over the next few years.
Arcadia is owned by Sir Philip Green, who recently led a review into how government departments could cut waste, said that the store closures would be made as leases came up for renewal. Mr Green said that there are around 450 leases coming up for renewal in the next three years and he expects to close around half of these.
Arcadia also owns several other well known brands on the UK high street such as Evans, Wallis, Miss Selfridge and Dorothy Perkins and the news confirms the difficulties facing retailers over the past few years with no sign of trading conditions getting any easier.
Arcadia still made a profit of £133 million in the year to August, but a sharp drop of nearly 40 per cent with sales declining at an increased pace since April has led Mr Green and his management team to dispose of hundreds of shops.
Arcadia reported a 1.8 per cent margin loss because it did not pass on higher costs to its customers. Total global sales fell by 3.4 per cent.
In a trading statement Mr Green said: “We have seen a small reduction in like for like sales together with a 1.8% margin loss, having decided to maintain our prices and not to pass on any increases to our customers, absorbing such increases at a cost to the Group of £53m.
“Trading conditions remain extremely challenging, with style, quality and value at the top of our agenda and more important than ever,” he added.
Mr Green said the warm autumn weather had affected sales as people put off purchasing warm winter clothes.
Arcadia has been criticised by tax experts in the past after it paid out the biggest dividend in corporate history in 2005 of £1.2 billion to Mr Green’s wife, Tina, who lives in tax exile in Monaco, in a move that allegedly helped the family avoid a £350 million tax bill.
Arcadia runs 3,100 shops world-wide and employs 44,000 people.
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