Sir Philip Green warns of a profit plunge at Arcadia…

August 4, 2011

The billionaire businessman has told senior staff that profits at Arcadia, his retail conglomerate that includes Miss Selfridge and Topshop, will fall dramatically this year.

Arcadia, which also owns Dorothy Perkins, Wallis and Evans, is at current one of the UK’s largest private equity owned clothing retailer with more than 2,500 outlets.  Sir Phillip acquired the group some ten years ago, and they employ 45,000 staff.

Like other news stories of late, this again signals the downturn that has hit the high street retailers hard in recent months.

It’s believed that Sir Phillip has personally contacted hundreds of senior staff at Arcadia, be it in person or via a conference call, in recent weeks. Sir Phillip was keen to pinpoint stiff competition as a reason for profit losses as he told staff “It is as competitive as it has ever been.”

The current financial year – which runs until the end of this month – are expected to be a third lower, Sir Phillip told employees.

There have been a number of reasons as to why Arcadia is seeing the decline in profits that they are. Last December, the unusually bad weather kept some consumers away from the high street, leaving Arcadia with more stock than usual in the January sales. Sir Phillip believes this particular interference cost him £40m in total.

There is good news though for Arcadia, as despite the fall in profits it’s believed that Sir Phillip has reduced the group’s borrowings, which are expected to drop to the £300m mark by the end of the year, based on the fact that the business is still growing and turning over a substantial amount.

Further good news comes in the way of online trading, time and time again we are seeing retailers growing through online sales, and over the past year Arcadia’s online sales have grown substantially with a number of brands thought to be outperforming rivals.

Topshop will continue it’s international roll-out following the successful opening of the Manhattan store last year. Sir Phillip has plans to open a second flagship store in Chicago in September, with a Las Vegas store to follow in March 2012.

So despite the profit warnings laid down by Sir Phillip, Arcadia will continue to grow and perform at the highest level, proving that with every cloud there’s a silver lining,

In other news…

Thousands of packets of Kettle Chips have been recalled after a batch of the product may have contained pieces of plastic that look like crisps.

The Food Standards Agency (FSA) has issued a recall notice on four varieties of Kettle Chips, while the company itself said: “As a precautionary measure, we are asking customers not to eat the product and to contact us for a full refund.”

The lines involved are 150g bags of Wave Cut Lightly Salted, Wave Cut Salt & Pepper, Wave Cut Salt & Vinegar, and Lightly Salted Kettle Chips. All of which have a best before date of 29 Oct 2011.