Published: 21:57 BST, 6 September 2019 | Updated: 21:58 BST, 6 September 2019
Sir Philip Green has vowed to restore the fortunes of his loss-making Arcadia empire with a £135m overhaul, including plans to sell Topshop fashions through the Next and Asos websites.
Arcadia, which also owns the Dorothy Perkins, Wallis and Miss Selfridge brands, revealed it had lurched into a £93.4m loss before tax for the 53 weeks to September 2018.
The previous year it made a profit of £164.6m.
Vow: Sir Philip Green is determined to restore the fortunes of his loss-making Arcadia empire
Taveta Investments, the ultimate parent company, made a loss of £177.3m, after a profit of £53.5m the previous year. Its losses were greater because of interest payments on loans to Arcadia.
But Green declared that he and wife Tina – who owns his retail empire – are determined to restore Arcadia to former glories. Their plans include deals to sell Topshop styles online through the Next website.
Wallis, Dorothy Perkins and Burton clothes are already sold on the site and Topshop and Topman will be launched in the next couple of weeks.
Topshop will launch on the Asos site as well, where Topman clothes are already sold, in the next two weeks.
Green has done a similar deal with fashion site Very. All his brands are already on the Zalando website.
He has set up a new 1.2m sq ft distribution centre in Daventry, Northamptonshire, with state-of-the-art automation technology.
Currently 280 staff are employed there and next year, when it is fully operational, there will be between 750 and 900.
Not everyone is convinced. Veteran retail analyst Richard Hyman said: ‘All these brands, apart from Topshop, are in long-term decline.’ Green earlier this year saved the business from insolvency by signing up to a string of rescue deals known as company voluntary arrangements (CVAs).
He told the Mail: ‘Now we have given ourselves a fresh start.
‘We are working earnestly with all the landlords, all the suppliers and all the staff.
‘We have to crack on and get the business back to where it was before or even better.
‘There has obviously been a fantastic effort by everyone to support the CVAs.
‘Hopefully now they can see the existing and new opportunities that have been created.’
Green added that Tina had promised large sums to support the business and its retirement fund, where the deficit has more than halved to under £140m. My wife has committed in excess of £200m to the business and its pension fund so that’s a pretty big incentive to succeed.
‘It is a real demonstration of commitment in my book.’
Monaco-resident Tina collected a £1.2 billion dividend from Arcadia in 2005. Green denied rumours that he is seeking to sell off some of the brands saying there has been ‘zero conversation with any third parties about breaking the business up’.
As a result of the CVAs, Arcadia has made savings of around £60m from rent reviews and store closures. It has also saved £10m by closing US stores.
But auditor PwC has warned the company might not be out of the woods yet.
One potential concern is a £310m mortgage on the flagship Topshop store on London’s Oxford Street, which falls due for repayment to a group of lenders led by HSBC at the end of this year.
However, Green is understood to be confident he can refinance the mortgage.
Insiders believe that, barring unforeseen events, the business could be back in the black by this time next year.