Arcadia shrugs off summer washout

Profits at the group - which includes Topshop, Miss Selfridge, Dorothy Perkins and Burton - were up from £288.6 million to £293.3 million after a 2.1% rise in like-for-like sales.

Sir Philip said it was "a very creditable performance" against "one of the worst non-summers in many years" for High Street fashion chains.

He said the new year started well in September, but much of the good work was undone by a warm October which has dampened demand for autumn and winter ranges.

However, sales at Topshop are surging ahead thanks to booming demand among young shoppers for "trendy" clothes - particularly those designed by Kate Moss.

The supermodel linked up with Topshop for a reported £3 million last year, and her new Christmas collection went on sale today. Although there have been mixed reports of the success of her autumn and winter range, Sir Philip today praised Moss's work.

"It is going very well and we are launching the next collection today," he said. "It has been very successful and it's now selling in 21 countries."

Sir Philip said group sales were up 1% since the start of the new financial year in September despite double-digit growth at Topshop, Topman and Miss Selfridge. Burton is also performing reasonably well, but strong sales across the rest of the group in September were undone in October.

"September was good but October has been poor because it has been too warm," said Sir Philip. "People should be very careful what they read into September. There was a good start because this year we had some seasonable weather and last year we had an Indian summer."

Sir Philip said young shoppers keen on fashion were still spending money but said that older customers looking for clothes to suit the weather held on to their cash in October.

"Where there are trends and fashions people buy regardless," he said.

He sounded a note of caution about Christmas trading amid signs that shoppers may be tightening their belts. However, he added that if the product was right, people will buy.

"People go shopping at Christmas," he said. "There will be buyers but one has to be cautious. We are keeping things tight and being careful.

"It is going to be about having the right inventory, the right merchandise. It has to be very right and there has to be a good reason to go shopping. It is about quality, the right fashion and a good environment to shop in. There is absolutely a flight to fashion and quality."

Total sales at Arcadia were up 5.2% to £ 1.86 billion in the year to 1 September, but Sir Philip decided not to pay a dividend. He famously paid himself a £1.1 billion dividend from Arcadia profits in 2005, just three years after buying the company for £850 million.

Today he said: "We are growing all parts of the business and I am committed to spending money across all of the brands."