Even Sir Philip Green is feeling the pinch

In a sign of just how tough conditions are on Britain's high streets, Sir Philip Green is expected to report this week that his retail empire has seen its profits slump by about a third.

The Arcadia group, which includes the Topshop and Bhs brands, is expected to report a pre-tax profit of between £140m and £150m for the year to the end of August, compared with £213m last time. The company, which also owns the Dorothy Perkins, Wallis, Burton, Miss Selfridge and Evans chains, is expected to say that sales have deteriorated further since the end of its financial year, because a mild autumn has combined with rising economic gloom, reducing shoppers' appetite for warm winter clothes.

Most retailers have been forced to slash prices in the hope of shifting stock, which has meant they need to sell even more goods if they are to maintain their earnings.

Arcadia is the latest in a series of major retailers to report falling sales in recent weeks. Mothercare and French Connection both saw their share prices dive after unveiling disappoint trading figures.

Carphone Warehouse recently called time on its 11 Best Buy electrical stores in the UK, while Comet was sold to the turnaround specialist Opcapita for just £2.