Green sheds light on high street pain

A snapshot of trading at Philip Green’s retail empire emerged today with indications of record years at Topshop and Topman but a downturn at Bhs.

In a series of newspaper interviews at a retail conference in Barcelona, the entrepreneur described the trading climate as the toughest he can remember.

He refused to be drawn on sales figures for his privately-held business portfolio, but he did say that the fashion chains in his Arcadia business – such as Topshop, Topman and Miss Selfridge – were “fine”.

Green told the Times: “I’ll stick my neck out in your paper and say Topshop and Topman will have record years. What’s a record? Better than last year.”

In contrast, department store chain Bhs suffered a “horrible” three to four weeks along with the majority of the sector.

Asked by the Financial Times about BHS’s sharp reverse in 2006 – when profits declined to £51.4m (€64.1m) from £114m (€142.2m) in 2005 – Philip conceded “we’re going to have another one”. This follows a slightly improved operating profit in the year to March 2007 of £52.7m (€65.7m).

“What’s killing me is the underlying costs,” he said. “Underlying sales, like my margins, are not too bad.”

He said there was no way retailers could pass on rising costs to the consumer, despite the return of clothing price inflation in China.

Sir Philip added: “The market is probably as difficult as I’ve seen it: very challenging…whether it be food retailers who carry non-food to general high street, nobody is excluded from this.”

He said those likely to emerge stronger would be the chains who focused on having good store environments, fresh products and newness.

Philip told the Times: “It’s not going to be just about price. It’s going to be about ”price and nice“.

His retail empire is set for further expansion, with the first Topshop store in the United States due to open in October in New York, while the billionaire is also expected to look at emerging markets such as China and India.

Green, who targeted Marks & Spencer in a takeover attempt in 2004, also expressed his support for M&S chief executive Stuart Rose, who is under pressure from some investors over his proposed elevation to executive chairman.

He told Retail Week: “In the light of the current difficulties in the marketplace, if I was an institutional investor in Marks & Spencer, my principal focus would be on there being minimal disruption in one of the most challenging times in retail we’ve seen.”