Arcadia Group Ltd., the U.K. fashion retailer owned by billionaire Philip Green, said it is cautious about the year ahead as sales growth slowed in the first weeks of the fiscal period.
The retailer said U.K. same-store sales growth in the first eleven weeks of the new year slowed to 1 percent from 1.3 percent in the year ended Aug. 28, according to a statement. Operating profit climbed to 279.6 million pounds ($445.4 million) from 253.3 million pounds a year earlier.
Green, whose Arcadia has 3,121 owned and franchised outlets in 37 countries, said he plans to grow the business this year, though he remains cautious, citing the increase in value-added taxes, raw materials and wages. Green acquired Arcadia, the owner of the Topshop chain, in 2002 for 850 million pounds. Topshop sells clothes such as a faux-fur hooded gilet for 70 pounds targeted at young, fashion-savvy customers.
“Topshop, Topman are still good, both delivered a record year,” Green said. “Wallis has had a good year, Dorothy Perkins has been steady. Menswear has been tougher. Probably our toughest brand has been Evans,” which sells bigger sizes.
The executive plans to sell about 200 stores in his portfolio, Green said in an interview, adding that the smaller shops are not “hugely profitable.”
Green opened his first Topshop store in the U.S. in March last year. The billionaire said he will look at two or three sites when he goes to New York in the next few days. He has also signed a contract for a new store in Chicago. He opened an outlet in Japan this year, agreed to open in Brazil and is in talks for a Topshop outlet in Australia, he said. The executive is also selling Topshop clothes wholesale in ten other countries as “test markets.”
“We’re very well financed, it’s a long game,” he said.