Retail group Arcadia to close up to 260 stores
RETAIL gaint Arcadia plans to close up to 260 stores, its owner warned today, as the group reported a near-40% fall in annual profits.
Sir Philip Green said the closures would involve more than half of the 450 to 460 stores on which the leases were due to expire in the next three years.
Arcadia, which owns chains including BhS, Top Shop, Miss Selfridge and Burton, reported underlying pre-tax profits for �133.1million for the 52 weeks to August 27, down from �213.1million the previous year.
Like-for-like sales including VAT fell by 1.8% and margins were also squeezed, falling by 1.8%, as the group absorbed prices increases rather than pass them on through higher prices, at a total cost of around �53m.
At the bottom line, Arcadia posted a loss of �120m due to a write-down in the value of some “onerous” leases within its estate of 2,507 stores, to reflect the challenging economic outlook.
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Sir Philip told BBC Radio 4’s Today programme: “We have got – from my memory – 450 or 460 stores where leases expire in the next three years. And I think on our latest summary we will close more than half of those on lease expiry, so I would say, I would expect us to close 250, 260.
“Now, there may be other opportunities that turn up that we might want to open. But certainly, in terms of our existing portfolio, currently that’s our thinking,” he added.
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There was no word on the location of the stores likely to be closed or on how many of the group’s 44,000 employees might be affected.
However, with the predicted number of closures representing around 10% of the group’s current network of stores, the impact is likely to be felt across the country, including within East Anglia.