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Business News

Fashion chain reports return to profits growth

Sir Philip Green's Topshop and Dorothy Perkins empire today reported a return to annual profits growth despite "one of the most challenging retail landscapes" ever seen by the billionaire fashion boss.

Arcadia, which also owns brands including Miss Selfridge, Wallis and Burton, posted a 13 per cent rise in pre-tax profits to £213.6 million for the 12 months to August 29.

The growth marks a turnaround in performance after profits declined in the previous two years by 5 per cent and 1.6 per cent respectively.

Its fashion brands Topshop, Topman and Miss Selfridge had an "excellent year", notching up record sales and profits, according to the group.

Arcadia added that its Topshop store in New York - its first foray into America - was performing ahead of plan after the launch in April.

Overall UK like-for-like sales remained flat on a year earlier, but Arcadia reported an improving picture in recent months with comparable sales up 2.3 per cent in the seven weeks since its year-end.

The group's owner Sir Philip cautioned the sector faced further challenges ahead of the Government's planned New Year reversal of the VAT decrease from 17.5 per cent to 15 per cent.

He said: "I remain optimistic, but cautious as I believe the market will remain challenging and price sensitive.

"The VAT increase, unemployment and a general election will all impact upon the market."

Arcadia also named chief operating officer Ian Grabiner as chief executive of the group following the full integration of Bhs in July.

The group announced it was merging the two earlier this year in an effort to streamline operations and cut costs.

They had been run as separate businesses since Sir Philip bought Bhs in 2000.

He bought the Arcadia group in 2002.