24/11/11
By Karen Moss
The Arcadia Group has confirmed mass closure of their High Street stores as profits slumped in the first three quarters of 2011. The fashion retailer has 480 leases coming up for renewal in the next three years, and boss Sir Philip Green said he expected to close between 200 and 300 of those.
He added that current trading suffered due to the unseasonably warm Autumn we have just witnessed. But while like-for-likes since year end fell 4.4 per cent, internet sales grew 21 per cent.
Green said: “Our young fashion brands Topshop, Topman and Miss Selfridge are trading positively. Trading conditions remain extremely challenging, with style, quality and value at the top of our agenda and more important than ever.”
Total sales came in at £2.68 billion in the year while e-commerce sales increased 27 per cent. Arcadia invested £112.8 million into the business in the period, and ended with year end bank debt of £444.5 million.
Green said: “Given the very challenging conditions both in the UK and around the world, I am pleased to report cash generation of £297 million. We have seen a small reduction in like for like sales together with a 1.8 per cent margin loss, having decided to maintain our prices and not to pass on any increases to our customers, absorbing such increases at a cost to the Group of £53 million."
Chris Webster, VP Head of Consumer Products and Retail at Capgemini, comments: “We are still spending, but we’re being selective and this trend will be very apparent this Christmas. Technology is evolving and so is the consumer. Gone are the days when we were limited to shopping just on the High Street and were at the mercy of the weather.
"Shoppers have become very savvy, out of both need and convenience - we’ll hunt down the best bargains online to get the most out of our Christmas budget, but also because we can, easily and conveniently. Retailers understand consumer behaviour and have adapted accordingly, embracing the opportunity devices such as smart phones and tablets offer them in connecting with potential customers.”
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