Sir Philip Green’s Arcadia Group has suffered an unprecedented loss of 169 million pounds, as the ailing business narrowly avoided a collapse in June this year.
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Accounts filed by Arcadia’s holding company Taveta Investments Ltd showed turnover fell 4.5 percent to 1.81 billion pounds, while operating profit fell to 78.1 million pounds from 124.1 million pounds a year earlier.
It recorded exceptional items of 217 million pounds, contributing to the 169 million pounds loss, which compared to a profit of 49 million pounds a year earlier, according to Reuters.
“The retail landscape has changed dramatically over recent years and the increased competition from other high street and online retailers in particular has had a significant impact of our performance,” the company said.
It continues to be challenging time for Sir Philip Green’s retail empire, but the group implied it is weathering the storm and is very clear on its strategic direction.
Auditor PWC noted in the accounts there were a number of matters, including for example external market conditions that could potentially be impacted by Britain leaving the EU, that might cast “significant doubt” about the group’s ability to continue as a going concern.
The company said profits fell because it was not able to close stores at the same rate that sales dropped.
The BBC said the results highlight the importance of refinancing a 310 million pounds loan on the flagship Topshop store on London’s Oxford Street, which is currently due to be repaid in December.
If that does not happen, the company said “the lenders would be able to enforce their security on its property in order to recover their debt.”
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The directors expressed confidence that the loan can be refinanced. The Oxford Street flagship remains an attractive site, with Nike taking an additional floor in the building, while space previously used by Miss Selfridge has been leased to retailer Vans.
(Source: Fashion United)