Sir Philip Green failed to lift the gloom on the high street yesterday, unveiling operating profits down sharply at the Bhs store chain and warning that a cut in interest rates would have little impact on trading before Christmas.
The Bank of England's Monetary Policy Committee is widely expected to reduce interest rates tomorrow by at least 0.25 per cent, but Mr Green, the billionaire retail tycoon, said: "Fundamentally, if there is an interest rate cut in the short term, other than sentiment, it is not going to massively help the consumer."
His comments came as Bhs delivered a 40 per cent drop in operating profit to £30.2m for the 52 weeks ended 29 March. The retailer's total sales dropped by 1.4 per cent to £860.3m and its like-for-like sales fell by 2.9 per cent.
Robert Clark, the senior partner at Retail Knowledge Bank, said that sales performance was "not very good", given that many retailers had traded robustly in the year to March. Mr Clark said: "Things have only really dropped off since July."
Over the last six weeks, Mr Green said Bhs's sales were down by 4 per cent, which reflected not only the market but the impact of "erratic" weather patterns. Mr Green said: "Trying to read [trading] is virtually impossible from one week to the next."
Mr Green singled out the performance of certain product categories. He said: "In particular, our childrenswear ranges, which at +5 per cent, have benefited from clear branding and great products, and also our home product, which has outperformed the market with sales growth of 6 per cent."
However, he conceded that its womenswear unit had "struggled slightly", which he said was partly because some products were "not right for the market".
Bhs increased capital expenditure by £20m to £53m in its last financial year, which includes the store refurbishment programme. The 33 refurbished stores are delivering sales 9 per cent above the rest of the Bhs chain.
The billionaire revealed that he is to hold a meeting with leading landlords today to discuss the prospect of retailers moving from quarterly rents paid in advance to monthly payments, but he declined to comment further.
Mr Clark said that Bhs was in a "classic middle market squeeze" between the value fashion giant Primark and the supermarkets, and fashion retailers such as River Island.