LONDON — Arcadia Group, parent of Topshop and its fast-fashion sister companies Miss Selfridge and Topman, saw relatively flat profits on a 2.7 percent increase in sales in the year ended Aug. 29.
Arcadia said profits rose 0.36 percent to 164.7 million pounds, or $258.5 million, from 164.1 million pounds, or $257.6 million. Sales increased to 1.89 billion pounds, or $2.97 billion, from 1.85 billion pounds, or $2.9 billion, the previous year. All figures have been converted at average exchange rates for the year.
Arcadia owner Sir Philip Green said Topshop, Topman and Miss Selfridge had an “excellent” year, producing “record turnover and profit.”
Green told WWD Topshop’s first Manhattan outpost, which opened in April, contributed “small money” to the overall results, but he confirmed the American store would be profitable in its first year.
As reported, Green is trying to nail down a second site in uptown Manhattan, but said talks are still ongoing and nothing has been confirmed.
Arcadia’s pretax profits rose 13 percent to 213.6 million pounds, or $335.4 million, from 188.9 million, or $296.6 million. In 2008-09, Arcadia’s taxes were nearly double those of the previous year, due to the resolution of a pending item from the 2007-08 accounts. As of 2008-09, the group’s tax rate has returned to normal, according to Green.
The Arcadia chief said he was optimistic, but still very cautious about the current year. “I think in this business you’ve always got to be an optimist. You don’t go into it unless you are one,” he said, adding: “The market here hasn’t recovered. You’d be in dreamland to think so.”
He warned the U.K. market would remain “challenging and price sensitive” this year, although there appears to be an uptick in consumer confidence. He pointed out that U.K. like-for-like sales in the first seven weeks of the current fiscal year were up 2.3 percent. By comparison, in 2008-09, U.K. like-for-like sales were flat against the previous year.
He added the company generated cash of more than 330 million pounds, or $518.1 million, even with the recession.
Arcadia, which operates 3,115 owned and franchised outlets in 34 countries, also includes more mainstream women’s wear brands such as Dorothy Perkins, Evans and Wallis.
British Home Stores, known as Bhs, another of Green’s retail chains, was fully integrated into Arcadia Group at the end of the fiscal year, although its accounts have not been consolidated into the 2008-09 group ones.
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