LONDON — Sir Philip Green, British retail mogul and owner of Arcadia Group, Topshop's parent, reported a 22 percent drop in profits to 142.9 million pounds, or $267.1 million, from 182.6 million pounds, or $341.3 million, for the fiscal year ended Sept. 2.
It was the first profit fall since Green purchased Arcadia in 2002 and turned around the mass-market clothing group, which owns brands including Topshop, Topman, Miss Selfridge, Wallis and Dorothy Perkins.
Arcadia is wholly owned by Green and his family, who took the company private when they purchased it.
Sales rose 1.7 percent to 1.8 billion pounds, or $3.36 billion, from 1.77 billion pounds, or $3.31 billion. Green said Thursday he would not be taking home his usual, headline-making dividend to his family. Last year, Green made waves in the British press when he wrote a 1.2 billion pound, or $2.3 billion, check to himself on the back of rising profits.
That paycheck helped Green maintain his number-five ranking on the Sunday Times of London 2006 Rich List. The Sunday Times also named him the richest person in British fashion, with a personal fortune of 4.9 billion pounds, or $9.15 billion.
On Thursday, Green put a brave face on the year-end results. He called the company's performance at operating level "strong, when set against a competitive retail market, significant investment in new space by our competitors, and underlying cost inflation for all retailers."
He said in a statement the company's operating margin of 16.7 is "still among the best in the industry." However, he also admitted like-for-like sales since Sept. 2 were down 1 percent.
Green wasn't the only one to put a positive spin on Thursday's results. Richard Ratner, chief analyst at Seymour Pierce in London, said, "The current trading statement is much better than a lot of other clothing retailers'. We are not surprised that he has not paid a dividend. Our view is that he wants to pay the debt down and then start again in another three years' time with another fat dividend."
Although Arcadia does not break out figures for its separate brands, Green said a top performer, profit-wise, was Topman, but Topshop's results were flat.Poor performers included Miss Selfridge, a young clothing and accessories brand more classic and less directional than Topshop. According to the report by Seymour Pierce, that brand lost more than 3 million pounds, or $5.7 million.
As reported, Green is making a big push at Topshop, where he's recently hired Kate Moss to design a collection that will hit the shop floor in the spring. Topshop's retail Web site will go live in the U.S. around Christmas, and there are plans to open a stand-alone store in Manhattan, although nothing has been confirmed yet. Earlier this month, Topshop lost its longtime brand director, Jane Shepherdson.
Green is forging ahead on all fronts. He said in Thursday's statement that the company has committed this fiscal year to 30 million pounds, or $56.7 million, of new space and refurbishments, "demonstrating our confidence in the business and the brand management teams."
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