Profits down but Bhs boss is confident

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Sales at the group dipped 1.4% to £860 million in the year to the end of March, sending profits down from £50 million to £30 million.

Sir Philip also paid off a £100 million loan, leaving the group with debts of £63 million, in what he said was a sign of prudence.

The entrepreneur bought Bhs for £200 million in 2000 when most retailers assumed it was finished as a brand. He rejuvenated the company to such an extent that he was able to pay himself and his wife a £1.2 billion dividend. However, he has not taken a divi for the past four years.

"Let's all try and get on the front foot," he said. "The market is challenging, but I am not a doom-monger. Are there underlying concerns? Yes. Is the world going to end? Of course not."

In a swipe at rivals, he said the tougher conditions should allow "proper" retailers to flourish, adding: "It will be about old-fashioned traders. There will be no more financial engineering, it will be about product."

Sales are down 4% in the last six weeks, suggesting shoppers are being cautious. Sir Philip said: "Picking up the paper every day, how is the consumer not going to be afraid? I am not as scared as everyone else."

He recently said he intended to hire a chief executive to run the business, though that plan seems to have faded into the background. There have been rumours in the City that he has looked for a buyer for Bhs, allowing him to concentrate on the Topshop chain he also owns.

But he gave no sign today of wanting to do a deal, insisting he was focused on running the business. Sir Philip controls about 12% of the UK clothing market, putting him second only to arch-rival Marks & Spencer.

His Arcadia group includes Burton and Dorothy Perkins among others. So far, 33 of the 180 Bhs stores have been refurbished, with the store on Oxford Street recently completed.

Sir Philip said sales in the spruced-up stores have been "very encouraging", and ahead of the rest of the chain. Despite the downturn, he remains one of the richest men in Britain with assets of almost £4 billion.