Philip Green, the billionaire proprietor of U.K. fashion retailer Arcadia Group Ltd., predicted a weaker Christmas season after the owner of the Topshop and Topman chains slumped to a full-year loss.
Holiday business this year will be “slightly softer” as a struggling economy restrains consumer spending, the 59-year-old entrepreneur said in an interview with Bloomberg Television.
Arcadia made a pretax loss of 120 million pounds ($186 million) in the year ended Aug. 27, caused by provisions for “onerous” leases on some stores. Excluding the non-cash charges, pretax earnings fell to 133.1 million pounds from 213.2 million pounds a year earlier, the company said today by e-mail.
“Trading conditions remain extremely challenging,” said Green, whose family ranked 13th in the Sunday Times Rich List with an estimated worth of 4.2 billion pounds. Same-store sales fell 1.8 percent in the year and are down 4.4 percent in the first 12 weeks of the new year as the warmest October and November on record slowed sales of winter garments.
“If you don’t need a coat, you don’t buy one,” Green said, adding that BhS department-stores are experiencing tougher conditions than the Topshop, Topman and Miss Selfridge chains.
Arcadia’s margin, a measure of profitability, narrowed by 1.8 percentage points in the year as the company held down prices amid rising costs for raw materials such as cotton.
The retailer aims to close about 250 out of 450 stores whose lease is due to expire in the next few years, spokeswoman Alana Symonds said by e-mail. Arcadia owns 2,507 stores, and has 600 franchised outlets across 36 companies.
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