Nov 14, 2013
Arcadia sales slip on milder weather
Nov 14, 2013
LONDON, England - Arcadia, the Topshop-to-BHS British retail group owned by the family of billionaire Philip Green, said underlying sales fell 3.7 percent in the last 10 weeks, affected by unseasonably mild weather.
That was after the group, which also owns the Topman, Burton, Dorothy Perkins, Miss Selfridge, Wallis and Evans brands, had to rely on smarter buying to eke out a small rise in annual underlying profit.
"Trading conditions remain challenging," the firm said on Thursday.
Arcadia made a profit before tax and one off items of 167.8 million pounds ($268.3 million) in the year to Aug. 31, up from 166.9 million pounds last year when profit had risen 25 percent.
Britain's retailers have generally enjoyed a better year as the economy moved back into growth, though a warm autumn has hampered some clothing chains' ability to shift winter ranges and executives see continued pressure on consumers with wage rises lagging inflation.
Arcadia's total sales rose 2.2 percent to 2.74 billion pounds, while like-for-like sales were down 2.7 percent.
Retail margin was up 1.2 percentage points, reflecting better buying, including more buying from factories in the UK and Europe, tight management of stocks and less mark down.
A non-cash provision of 33.2 million pounds was taken for onerous store leases.
Last year Green sold a 25 percent stake in Topshop/Topman to U.S. private equity firm Leonard Green & Partners for 350 million pounds, in a deal that valued those businesses at 2 billion pounds.
The proceeds from that deal meant Arcadia ended the year with net cash of 74.7 million pounds compared to debt of 308.9 million pounds last year.
But for the eighth year running Green did not pay a dividend. In 2005 he geared up the business to pay his Monaco-resident wife Christina, the ultimate owner of Arcadia, a 1.2 billion pounds dividend.
Having opened 127 overseas franchise stores in the 2012-13 year, Arcadia plans to open 161 in 2013-14, including stores in Vietnam, Thailand, South Africa, Russia and Brazil.
Globally the group currently trades from a total of 3,045 stores.
($1 = 0.6254 British pounds)
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