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Sir Philip Green's retail empire suffers 42pc profits slump and closes stores

Profits at Sir Philip Green’s retail empire have plummeted 42pc as the group axed more than 40 stores in the face of the brutal conditions on the high street.
Taveta Investments, the company behind Topshop-owner Arcadia, booked operating profits before goodwill, amortisation and exceptional items of ?124.1m for the year to August 26, 2017.
This was down from ?215.2m  for the year before.
Sales also came under pressure, sliding 5.6pc to ?1.91bn, as the firm grappled with the “highly competitive and challenging” retail environment.
The group closed 41 shops when leases came up for renewal during the period, while negotiating a rent cut on a further 25. Its total store estate including concessions is around 2,800 worldwide.
Sir Philip Green's retail empire suffers 42pc profits slump and closes stores

Sir Philip Green

Credit:
Andrew Crowley
Taveta Investments owns the Arcadia group of fashion brands, including Topman, Topshop, Burton Menswear, Dorothy Perkins, Evans, Miss Selfridge, Outfit and Wallis.
Ian Grabiner, the chief executive of Taveta, said the “disappointing” sales and profits were partly offset by a 11.5pc jump in online sales.
He said: “The retail environment remains highly competitive and challenging.
“The increase in digital sales is taking place at the expense of traditional ‘bricks and mortar’ retailing, as consumers embrace the opportunity to purchase across all the channels available to them.
Sir Philip Green's retail empire suffers 42pc profits slump and closes stores

Topshop is among the brands owned by Arcadia

Credit:
Luke MacGregor/Bloomberg
“Whilst we have found headline sales and profits disappointing, we remain a strongly cash generative business and had a positive net cash balance at the year end of ?157.2m.”
The group was hit with a ?29m charge for the 52-week period from fixed asset impairments, a provision for onerous leases and the revaluation of investment properties.
 Taveta’s pension liability shrunk by ?126.8m to ?300m, and pre-tax profits rose 45pc to ?53.5m as the group was met with lower exceptional costs.
Sir Philip faced intense political scrutiny after selling BHS for ?1 before it collapsed, hitting 11,000 jobs, 19,000 pension holders and leaving a ?571m black hole in its pension scheme.
He later agreed to pay ?363m towards the scheme to end action against him by the Pensions Regulator.
The latest results come after Sir Philip denied reports earlier this year that he was plotting a sale of the group to Chinese textiles firm Shandong Ruyi.
sir philip green
Retailers have been battling with a double whammy on the high street of dwindling consumer confidence and escalating costs.
It has forced a string of high street staples to embark on sweeping overhauls of their businesses.
Rival fashion retailer New Look has already pushed through deep cuts to stores and jobs by pressing ahead with a company voluntary arrangement (CVA), a type of insolvency process that allows companies to shut stores and drive down rents.
Troubled department store chain House of Fraser is also among the retailers eyeing a CVA in bid to shore up its financial fortunes.
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