Philip Green’s Topshop and Burton empire plunges to a £170m loss as it falls behind in ‘dramatically’ changed retail industry
- Arcadia Group includes Topshop, Topman, Dorothy Perkins, Burton and Wallis
- Accounts for holding company Taveta show it swung to £170million loss last year
- Sales across the group slumped by 4.5 per cent to £1.8billion
The fashion empire owned by Sir Philip Green and his wife Tina plunged to a bruising loss last year, as it came up against hot competition and a ‘dramatically’ changed retail landscape.
Accounts for the year to September 2018 reveal that the Arcadia group, which includes Topshop, Dorothy Perkins and Burton, suffered losses of nearly £170million, compared with profits of £50million the year before.
The numbers come just weeks after the firm was given the green light to carry out urgent restructuring through seven Company Voluntary Arrangements (CVA).
Topshop owner Arcadia has been given landlord backing to close some of its UK stores
That means it can shut 48 of its under-performing stores and pay reduced rents on many others as it attempts to turn it fortunes around with a three-year transformation plan.
Without the restructuring – agreed to begrudgingly by some landlords – it said would be on the brink of administration, putting the jobs of its 17,000 employees at risk.
Sir Philip Green (above) owns the Arcadia fashion group with his wife Tina
The results for Arcadia’s holding company Taveta Investments revealed that sales fell 4.5 per cent across the group to £1.8billion.
This reflects ‘the ongoing challenging global market conditions for retailers’, the company said.
Its bottom line was dented by one-off costs totalling £217million.
With these stripped out, the group, which also counts Miss Selfridge and Wallis among its brands, generated £78million in profits – down from £124million a year earlier.
It said: ‘After coming through a challenging year, we are now very clear on our strategic direction.’
The group also revealed that it is trying to secure a cash injection to cover the £310million mortgage on its Oxford Street store, which is due for repayment in December.
The building has been partly let to other brands as Arcadia seeks to minimise its costs.
The accounts come in a difficult week for the Arcadia Group as it grapples with the loss of two senior team members – interim chairman Jamie Drummond Smith and chief operating officer David Shepherd.
It also follows reports last weekend that the company is considering spinning off one or more of its brands to generate fresh funds.
Arcadia is one of a number of high street firms to resort to a CVA in the last couple of years, including Carpetright, New Look, Debenhams and Mothercare, as traditional retailers struggle with rising costs, changing shopping habits and weak consumer confidence.