Philip Green's Arcadia Group Blames Weather for Topshop Slump

Philip Green's Arcadia Group said milder than expected weather had affected sales at its retail outlets which includes TopShop, Dorothy Perkins and Miss Selfridge.

The group reported that underlying sales fell by 3.7% in the last 10 weeks.

"Trading conditions remain challenging," said the firm.

Arcade made a profit before tax and one off items of £167.8m ($268.3m, €199.7m) in the year to August 31 up from £166.9m in 2012 when profits had risen 25%.

Similarly, retail margins were up 1.2% that reflected better consumption, including more buying from factories in the United Kingdom and Europe.

Total sales rose 2.2% to £2.74bn while like for like sales were down 2.7%.

Meanwhile. the Office for National Statistics said the mild weather in October meant that UK high street sales had fallen 0.7% month on month.

Company Focus

According to a statement released by the company in line with their financial results, Arcadia Group opened 127 new outlets this year.

Topshop and Topman accounted for 50 of those that their total number of franchised outlets the firm operates to 659 in 42 countries.

It also said that they plan to open 161 new stores in the coming year as growth overseas accelerates.

One area of growth is Europe where the company said it has opened flagship stores in a number of locations including Galeries Lafayette in Paris, De Bijenkorf in Amsterdam and Karstadt and KaDeWe locations across Germany.

Furthermore, the firm said it was growing its business in the United States with Leonard Green & Partners, the US private equity firm that bought a 25% stake in Topshop/Topman for £350m.

The proceeds from that deal meant Arcadia ended the year with net cash of £74.7m compared to debt of £308.9m in 2012.

Green did not pay a dividend for the eighth successive year. His wife Christina, the ultimate owner of Arcadia, received a £1.2bn dividend back in 2005.