Arcadia sees big fall in profits from Irish stores

ARCADIA GROUP, the fashion company owned by British retail tycoon Philip Green, saw pretax profits from its Irish stores drop starkly in the year to the end of August 2010 amid “extremely difficult” trading conditions.

Accounts just filed at the Companies Office for Arcadia Group Multiples (Ireland) Ltd show pretax profits fell 84 per cent to £1.75 million (€2 million) compared to its previous fiscal year.

Turnover declined 14 per cent to £59.2 million at Arcadia’s Irish outlets as consumers cut back on discretionary spending and its young target market suffered the effects of high levels of youth unemployment.

The accounts for the company relate to the performance of five Arcadia brands: Topshop, Topman, Evans, Dorothy Perkins and Burton.

Of these, only Topshop and Topman generated an operating profit, the directors said in a report accompanying the accounts.

Topshop is more style-led than other Arcadia brands and much of its stock sells at higher price points.

Arcadia described gross profits across the Irish outlets as “markedly lower”, and said “all brands found trading conditions in Ireland extremely difficult”.

The directors added that the company had “sought to reduce costs wherever possible”, and that continuing investment in stores and the freshness of its product would enable it to grow its sales.

In common with other retailers, Arcadia has also tightened its stock management in response to slower sales. It said this would help it improve gross margins.

A representative of Arcadia was not available for comment yesterday.

The company employed 396 full-time people in Ireland last year. If part-time workers are included, the average monthly number of people employed by the company during the period was 901.

Mr Green’s British-based holding company Taveta Investments Ltd, which owns more than 2,500 stores worldwide, took no dividend from the Irish operation.

The performance of the Irish stores lags that of the rest of the group, which enjoyed a 6.4 per cent rise in pretax profits during the same period. The UK parent company also owns the chains Miss Selfridge, Wallis and Outfit.

Mr Green, who is one of Britain’s most high-profile retailers, has been the subject of criticism in the UK due to his tax status. The Arcadia group is registered in the name of his wife Tina, who is resident in Monaco.