Should we feel worried for Sir Philip Green, the billionaire clothes retailer? Yesterday he admitted annual profits at his Arcadia group comprising eight high street chains including Topshop, Miss Selfridge and Burton had slumped by £51m.
That plunge followed an even more precipitous fall at the Monaco-based tycoon's Bhs stores, which last month announced that their profits had shrunk by £59m, more than half. Last month Sir Philip's flagship Topshop brand lost its title of "best shop on the high street" to River Island after three years of dominance.
And Jane Shepherdson, Topshop's director who is credited with turning the budget chain into an innovative fashion force, dealt Sir Philip more bad news by announcing she was quitting. Ms Shepherdson, who has no job to go, later denied that she was angered by her boss's appointment of Kate Moss to design a new clothes range, though she confirmed she had had differences with Sir Philip.
So has the power of the rag-trade mastermind whose toughness and drive almost won him M&S two years ago past its peak?
Unsurprisingly yesterday, his response was a defiant "No". In defence of the latest figures, he pointed out that Arcadia's like-for-like sales stripping out variables were down just 1.9 per cent in the 12 months to 2 September amid unseasonably warm weather and tough competition. "I'm in the fashion industry. Everybody has blips," he said."Our operating margin at 16.7 per cent is still among the best in the industry. I'm a retailer, not a magician." Even so, Sir Philip's reputation as the retailer who can do no wrong, who has an instinctive feel for how to run a clothing empire, has taken a knock.
Things were far rosier in 2004 when Sir Philip was the toast of the City for overhauling the once moribund Bhs and fronting a £9bn bid for the faltering market leader Marks & Spencer. Only last year Sir Philip took home a spectacular £1.2 billion cheque from Arcadia - the biggest dividend payment to an individual in British business history and a testament to his business acumen. But this time there will be no dividend.
As he briefed The Independent on Arcadia's results yesterday, Sir Philip had lost none of the pugnacity that has made him a personal fortune of £4.9bn. But nor was there any of the characteristic profanity that usually accompanies his phone conversations with journalists - a politeness commensurate with his recent knighthood.
He stressed the complexity of running a business with 2,317 shops in the UK and 360 foreign franchises. On profit growth, he said: "It's unrealistic that you are just going to go on a straight [upward] line. Getting eight plates to spin all at the same time is not that easy. We're never going to get it all right."
Analysts believe Arcadia's stores have come under pressure from the aggressive budget chain Primark and a recovery at Marks & Spencer. However the initial verdict from veteran retail analyst Richard Ratner was positive.
Mr Ratner, of the stockbrokers Seymour Pierce, said the 1 per cent fall in like-for-like sales was "relatively good, given anecdotal evidence from other retailers". The results were "pretty decent" considering the trading conditions.
Others wonder if Sir Philip was too ambitious in saddling the company with debt to pay for his £1bn payout. Certainly debt payments have increased at Arcadia, which Sir Philip took private four years ago at what is now regarded as the bargain price of £850m. Interest this year was £80m compared with £57m interest last year, knocking £23m off pre-tax profits, which came in at £202m. Sir Philip, however, says that the business still has relatively little debt. "We have got a lot of real estate that we have never sold," he pointed out.
As a tax exile, Sir Philip spends his weekends in Monaco with his family where he plays tennis with Prince Albert. His personal generosity - he loves hosting lavish birthday parties and gives freely at charity auctions - is in contrast to his strict financial control at the office. According to the Sunday Times rich list, he and his wife Tina have a fortune of £4.9bn, along with the trappings of extreme wealth, such as a £20m boat, Lionheart, and a £27m Gulfstream jet. Showbiz connections are a major part of their life and they have partied with the likes of Beyoncé and Ozzy and Sharon Osbourne. The glitzy details of a lavish toga party thrown by the couple a few years ago were lovingly reported by the press.
But none of this schmoozing has diminished Sir Philip's immense appetite for the business world. Britain's fifth richest man stays in five-star London hotels during the week, working between 6am and 10pm. He often spends his lunch hour strolling down Oxford Street to inspect his and his rival's stores. He owns 92 per cent of Arcadia, whose other stores include Dorothy Perkins and Wallis, with the rest belonging to the banking group HBOS.
Arcadia yesterday did not break down results at its different chains, which also include Evans and Outfit. Topshop is thought to have performed well while Sir Philip told said Miss Selfridge had lost £3.5m. He told the financial community: "Like-for-like sales since the year end are down 1 per cent. However, our disciplined stock control has enabled us to maintain margins."
Sir Philip conceded earlier this year that he neglected Bhs while he was concentrating on the revamp of Arcadia. He believes he has now put that right by injecting some celebrity names. Interior designer Kelly Hoppen has created a new range of furniture while Gordon Ramsay has designed a range of saucepans, glass and china.
Sir Philip, the king of the high street, is far from losing his crown. As he surveyed his business position yesterday, he said: "If I wanted £5bn tonight for an acquisition - and it's 4.30pm now - I would wager I could get it by midnight."
The Philip Green cv
Born: Croydon, 15 March 1952
Education: Carmel College (a Jewish boarding school, now closed)
Business career: Leaves school at 15 and works as a shoe importer. Sets up first business with a £20,000 loan importing jeans from the Far East. Makes his first million turning round and selling Jean Jeannie, a jeans and casual clothing chain.
1988: Becomes chairman and chief executive of menswear company Amber Day. After series of damaging profit downgrades, resigns in 1992.
1995: With tycoon Tom Hunter, buys the Olympus chain for £1 plus £30m of debt. Sells three years later to JJB sports for £550m. Buys retail chain Sears UK and breaks it up at great profit, restoring his reputation
1999: Launches £7bn hostile bid for Marks and Spencer. After a protracted battle, he lets go. Instead purchases Bhs for £200m
2002: Buys Arcadia, which includes Topshop, Wallis and Burton, with backing from HBOS, for £850m
2004: Begins a new bidding war for floundering M&S. Company fights off the takeover and appoints Green's friend Stuart Rose.
2005: Awards himself £1.2bn dividend from Arcadia
2006: Amid tough competition and a an unseasonably warm autumn, profits fall at Bhs and ArcadiaReuse content