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Topshop owner Sir Philip Green today spoke of “one of the most challenging retail landscapes I have ever seen” and warned it will be a tough Christmas on the high street.
Hopes are growing that the recession is officially over but the billionaire clothes entrepreneur said it will be grim for some time to come as unemployment continues to rise.
He said there are signs that things are improving but warned that the rising number of people out of work and the reversal of the VAT cut — it goes back up to 17.5% from 15% after the New Year — will hit demand.
Sir Philip said: “We have still got a long, hard slog ahead.
“We may be off the bottom but there is a long, long way to go in terms of getting back to whatever normal turns out to be.
“We may be out of recession, but what is the definition of out of recession? I don't understand it. We have got two-and-a-half million unemployed.”
Asked about the outlook for Christmas, he said: “It should be better than last year, given how soft it was then, but there are no guarantees.
“We need some cold weather. We haven't had any cold weather and it is getting late so you start to get jumpy. It is all to play for.”
His warning came as his Arcadia empire, which includes stores such as Topshop, Miss Selfridge, Dorothy Perkins and Bhs, reported a 13% jump in profits for the 12 months to 29 August to £213.6 million.
Sales were up 2.7% to £1.9 billion although same-store sales in the UK showed no growth as the recession took its toll.
“This has been a hard slog,” said Sir Philip, who is not paying himself a dividend from the Arcadia profits. “Considering everything that could have happened this is a good result,” he added.
He said Topshop, Topman and Miss Selfridge, which are aimed at the younger market, enjoyed record years.
Sales at Topshop were again boosted by the impact of Kate Moss as the public face of the brand.
However, the stores aimed at older shoppers, such as Dorothy Perkins and Burton, continued to struggle. Sir Philip said things have improved in recent weeks with sales up 2.3% in the UK since the start of the new financial year.
But he refused to get carried away, pointing out that the same period last year was “ugly”.
Reader views (4)
The economy might recover a tad quicker if he didn`t avoid paying so much tax in the UK.
- Ian Nicholson, London, England
I think Sir Philip is going to be proved correct. My own Christmas will be the lowest spend ever/ If it comes to £100 I will be surprised. So far I have had to CUT more than 30% from my annual budget across the board, with cuts of 90% in some areas like clothes, holidays, drink and eating out.
- Albert Hall, hove england
"Ugly" - so is the stock in shops full of plastic shoes and the stink of chemicals as you walk in the door of a lot of these shops from the clothes made of manmade fibres. And then they are all in silly sizes. The shoes are too small for southern feet and the clothes are both designed and sized for anorexics. It's not the recession that will do for them, its their failure to provide wearable clothes for real people in real materials. If we are going to buy trash, we will go to Primark and pay trash prices for it. When I personally want better, I head for the Charity shops and seek out the cloths and clothes that used to be made well, using good natural fibre materials.
- Tallulah, Hove, UK
I heard him this morning on the radio and he didn't exactly sound like he knew too much about his 'empire'. Some entrepreneur. He isn't paying himself a dividend this year! What's worse, he doesn't pay many of his staff a decent living wage. It seems to me most of his staff simply work to pay for his family and freinds birthday parties.
- John, london, uk
