Stop the moaning, Sir Philip tells retailers

Sir Philip Green
Sir Philip Green
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TOP SHOP to Miss Selfridge retail giant Arcadia beat its high street rivals with a strong rise in profits despite reporting flat sales.

The group, which opened a new Topshop megastore fronting Briggate last month, said better stock management had led to less discounting.

Owner Sir Philip Green said retailers should stop moaning about the economic downturn, they need to raise their game.

“We’ve got to trade. I can’t keep listening to all these people making it up as they go along,” he said.

“We’re here in the streets, we’ve got 45,000 staff, we’ve got a £500m payroll, we’ve got to make it work,” he said.

Arcadia, which also owns Bhs, Topman, Burton, Dorothy Perkins, Wallis and Evans posted a 25 per cent rise in underlying annual profits to £170m.

Arcadia’s total annual sales were flat at £2.68bn, while like-for-like sales were down 0.7 per cent overall and down 3.2 per cent in the UK. However, margins rose 1.2 percentage points.

The group’s like-for-like sales rose 0.7 per cent in the first ten weeks of its new financial year.

E-commerce sales rose 22 per cent in the 2011-12 year.

Arcadia said trading conditions “remain challenging”.

For the seventh year, Sir Philip did not pay himself a dividend. In 2005 he paid his family a £1.2bn dividend.

He said that just as consumers have adjusted to the squeeze on their disposable income, retailers have to refine their business models and provide new quality products at even better value.

“We’ve got to up our game. If we sit there and cry and put on my front window the Bank of England said X, it isn’t going to help me take any money,” he said.

Sir Philip, who was knighted in 2006 and in 2010, said he would like to see the Government incentivise companies to invest in more training across all industries.

“If they want all these people off the street we’ve got to get people trained, let’s start there,” he said.

Sir Philip, who bought department store chain Bhs for £200m in 2000, Arcadia for £850m in 2002 and has twice tried to buy Marks & Spencer, said he is not averse to doing another major deal if the right one came up.

“There are two or three things in my head. If they ever turned up, we’d have to look at them,” he said, declining to elaborate.

If there is a major consolidation in the retail sector, he said Arcadia will “want to have a seat at the table”, and finance will not be an issue.

“Do I think the banks would back me to go and find money? Absolutely, we’ve delivered on everything we said we’d do,” he said.

Sir Philip said that given the “very challenging conditions” both in the UK and around the world, he is pleased to report strong cash generation of £330m.

“We have focused our efforts on being efficient in both stock management and delivering newness as regularly as possible, resulting in improved markdown and margin,” he said.

UK E-Commerce sales growth rose 20 per cent and International E-Commerce sales increased by 33 per cent.

Arcadia now operates in 112 countries.

The group opened 15 new stores this year, taking its total to 615 franchised outlets operating in 39 countries.

Its new Topshop/Topman outlet in Melbourne achieved record results. It will have been open for a year next month and is on course for £15m sales in its first year.

Strong opening performances have also been seen in Sao Paulo, Brazil and in Vancouver, Canada.

Arcadia has opened 14 Topshop/Topman concessions and developed an on-line presence with the US department store group Nordstrom.

It intends to continue to drive expansion strongly in both its US owned stores and in its international online business in the year ahead.

Given the challenging trading conditions, Sir Philip said that exciting and engaging customers across multi-channels is at the top of the agenda.

“I would like to thank all of the staff within Arcadia and Bhs for their commitment, energy and enthusiasm and our customers for their continued loyalty in shopping across our various high street brands,” he added.

Empire built from £100

Arcadia began life in the early 1900s when 18-year-old Lithuanian emigre Montague Burton arrived in Britain and borrowed £100 to set up a menswear business.

Within six years he had established a chain of Burton stores.

In 1910, the business relocated to Leeds, where Arcadia retains a major office location to this day.

Mr Burton supplied clothing for a quarter of the armed forces in the First World War. By the end of the conflict, Mr Burton employed 132 staff at its Leeds headquarters.

He began to develop the Hudson Road factory in Leeds in the 1920s. By 1935 the site, which now houses Arcadia’s accounting and facilities teams, became the largest clothing factory in Europe.