Sir Philip Green: Arcadia group will be debt-free by end of 2012

Sir Philip Green, the tycoon behind the Topshop to Bhs retail empire, vowed his group would be debt-free in two years' time as he unveiled a "solid" 6.4 per cent rise in its profits yesterday.

The billionaire is also considering closing a large number of stores as he shakes up the property portfolio at Taveta Investments, the holding company for the seven Arcadia brands and Bhs.

Topshop and Topman both delivered "record turnover and profit" and were again the engine of growth in the year to 28 August at Taveta, which saw pre-tax profits rise 6.4 per cent to £213m.

Sir Philip said the group's debt peaked in 2005 after he paid his Monaco-based wife a £1.2bn dividend, but he has reduced debt each year since then. The Green family has not paid itself a dividend, including for 2009/10, for five years.

Following the merger between Bhs and Arcadia in 2009, Taveta Investments slashed bank debt for the combined businesses by £146m to £464m in the year to end of August. Total sales came in at £2.78bn.

Sir Philip, who carried out a review of government spending said: "If you look at our eight-year performance, which has been pretty consistent, we will be debt-free by the end of 2012."

Total UK like-for-like sales rose by 1.3 per cent. The Arcadia retailers – Topshop, Topman, Burton, Wallis, Evans, Dorothy Perkins and Miss Selfridge – grew sales by 1.5 per cent for the year to 28 August, with Bhs being up by a more modest 0.9 per cent.

As well as the "record" performance at Topshop and Topman, Sir Philip said: "Wallis has performed well, and Dorothy Perkins and Miss Selfridge have been steady. Bhs has been better than last year." But he said that it had been "slightly tougher" at Burton, the menswear chain, and Evans, the plus-size brand. "Menswear generally gets tougher when the climate is tough and everyone now sells bigger sizes," he said.

Across all its brands, the group's underlying sales are up by 1 per cent since the end of August, although Sir Philip said he "remains cautious" about the year ahead in the wake of price hikes on raw materials, such as cotton, VAT going up to 20 per cent on 4 January and "some wage inflation".

Taveta Investments generated an impressive jump in cash on its balance sheet, up by £42.8m to £386m by the year end. The group plans to reshape its property portfolio by closing smaller stores and housing more brands under one roof, as leases come up for expiry over the next three years. The group has 2,542 company-owned and 579 franchised outlets in 37 countries.

Sir Philip has already created 215 concession departments within Bhs, primarily focused on Wallis and Dorothy Perkins. He said: "We have got 500 leases that expire over the next 32 months." While Taveta will continue to trade a number of the shops coming up for renewal, Sir Philip said: "There is a chance to close down some of the stores."

He added that he would continue to expand the reach of Topshop and Topman globally. Topshop, which opened in New York in April 2009, has signed for a shop in Chicago and Sir Philip said he was looking at other sites, possibly in Los Angeles and Miami. The group will also open five stores in Brazil, including one in Rio, and is close to signing sites in Australia and South Africa.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Engineer / Software Developer

£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...

Ashdown Group: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before