Arcadia Group Ltd., the U.K. fashion retailer owned by billionaire Philip Green, reported a 25 percent profit gain as fewer markdowns offset stagnant sales.
Pretax profit rose to 166.9 million pounds ($265 million) before one-time items in the year ended Aug. 25, the London-based company said today in an e-mailed statement. Revenue was almost unchanged at 2.68 billion pounds, while sales at stores open at least a year fell 0.7 percent, led by a 3.2 percent drop in the U.K., where the retailer runs store chains including BHS, Dorothy Perkins, TopShop, Miss Selfridge and Burton.
Arcadia, which has a presence in 112 countries, said it focused on managing inventory and product originality to drive earnings as sales were hurt by weak consumer spending.
“Trading conditions remain challenging, therefore exciting and engaging our customer across multi-channels is at the top of our agenda” Green, 60, said in the statement.
Business improved in the first 10 weeks of the new financial year, the company reported, with same-store sales rising 0.7 percent and profit margins strengthening further. Its comments echoed those of competitor New Look Group Ltd., which yesterday reported a 25 percent gain in first-half earnings and said sales started to grow after falling most of the year.
Green said he plans to pursue further expansion in the U.S. and online. Arcadia has 615 international franchised outlets and will open its first store in South Africa tomorrow. Its fourth U.S. store opens in Los Angeles in the spring. It also has 14 concession spaces inside Nordstrom Inc. department stores.