Arcadia and Bhs powering ahead

BILLIONAIRE Philip Green, one of the most powerful men in the High Street, said he is poised to deliver another year of profits growth for his Bhs and Arcadia stores empire and, unlike some of his competitors, remains 'optimistic' about prospects for the coming 12 months.

Monaco-based Green, who snapped up Arcadia for £850m last year, said underlying sales and margins had risen at Bhs and Arcadia over the crucial Christmas period.

At Arcadia, which owns Top Shop, Top Man, Miss Selfridge, Dorothy Perkins, Wallis, Evans and Burton, total sales for the period were up by 4.9%, and like-for-like turnover rose by 2.4%. Margins advanced by 0.8%, a performance Green said 'demonstrates the strength of our business in a competitive environment'.

Green said he started running stocks down in Bhs as early as October, when he recognised there could be a problem with overstocking on the High Street at Christmas. 'The weather was too warm and so we started pruning stocks in October and have been managing them very carefully since then. We adopted the same policy as soon as we got into Arcadia and its stocks are currently at their lowest-ever levels.'

The integration of Arcadia has gone 'extremely smoothly', he said. Cashflow is strong and Green has already paid down as much as £200m of the debt he took on to finance the deal. 'Although only 19 weeks into the current financial year, customer and sales responses to the new ranges, together with our leading brands, gives us confidence that we will deliver significant profit enhancement this year,' he said.

At Bhs, sales for the seven weeks to 11 January were up by 1.3% like-for-like and margins were ahead by 0.4%, taking the gain for the 41 weeks to 11 January to two percentage points, although like-for-like sales were flat. The business made profits of just over £100m last year and Green said he is pleased with its current performance.