SIR Philip Green, the retail tycoon behind Bhs, Topshop and Dorothy Perkins, has forecast a further "shakeout" on the high street and refused to rule out a swoop on ailing businesses.
The billionaire entrepreneur admitted yesterday that the marketplace was "very, very competitive" after he revealed a sharp drop in annual profits at his Bhs chain.
Sales at the department store operator were also lower in recent weeks as shoppers
tightened their belts.
Asked if tough markets would bring acquisition opportunities next year, Green said: "I think I've been cautious for a while, so it's just a question of let's have a look how the balls bounce. I don't know yet."
On Monday, insolvency specialist Begbies Traynor warned that hundreds of retailers face going bust in the New Year when banks pull the plug on finance. The firm has 323 UK retailers on its "critical watch list".
Green, whose family has an estimated fortune of almost £5 billion and who live in the tax haven of Monaco, acquired Bhs for £200 million in 2000.
His family owns some 94 per cent of the equity, while Scottish retail entrepreneur Sir Tom Hunter holds 5 per cent.
During the year to 29 March, operating profits at Bhs fell by nearly 40 per cent to £30.2m, while total sales were 1.4 per cent lower at £860.3m.
Like-for-like sales, which strip out new store openings and additional selling space, slipped 2.9 per cent but were down by 4 per cent in the last six weeks.
For the fourth year in a row, Green denied himself a Bhs dividend payout. He famously paid himself a £1.2bn dividend from his Topshop and Burton Arcadia clothing empire in 2005.
The decision to pay no dividend was down to Bhs's continuing refurbishment programme. Capital expenditure more than doubled to £53m in the year under review.
The group has completed the overhaul of a further 14 stores since the start of the new financial year, with results from those stores showing sales 9 per cent above the rest of the chain. Bhs has now refurbished 33 sites, including its flagship Oxford Street outlet.
Green described the results as "a solid performance in an exceptionally challenging market".
Green, who in 2004 tried and failed for a second time to buy Marks & Spencer, claimed that "erratic weather patterns" had hit trading in recent weeks.
"This last weekend, as bizarre as it is, was probably our best weekend for six months," he said. "Maybe (it] was better because it's the first time we've actually had some autumn weather in autumn."
Bhs reported a 5 per cent rise in sales of childrenswear ranges, while homeware products outperformed the market with sales growth of 6 per cent.
Internationally, Bhs has 15 franchise partners operating out of 93 stores in 16 countries. In the current year to date, international sales were up 14 per cent on a like-for-like basis.
N Brown has designs on a younger market N BROWN, the home shopping company which specialises in clothing for larger women, shrugged off retail gloom yesterday, posting a 20 per cent rise in first half profits writes Hamish Rutherford.
The company said that its target customer base – over 45s women with a fuller figure – continued to shield it from the wider sector woes.
It said it was also benefiting from sales success of new products and ranges from celebrity designers, such as Gok Wan from Channel 4's How to Look Good Naked.
Yesterday's figures showed pre-tax profits in the 26 weeks to 30 August rose to £40.8 million, on sales ahead by 12.6 per cent to £322.8m.
Trading since the half year was also up, by 11.8 per cent, with online sales growing strongly, according to the Manchester-based firm.
However, the statement showed that N Brown was not immune from the impact of the economic downturn.
It said it was reining in recruitment and tightening credit policies after seeing profit margins knocked by bad debts among its growing base of younger customers. Although the majority of its customers are aged between 45 and 65, its catalogues aimed at the under-45s are growing the fastest among its portfolio, with sales up 21 per cent to £94m.
N Brown said it was a calculated risk to attract the younger age group, as they offered a greater profit potential even though they come with a higher credit risk.
Ladieswear sales rose by 9 per cent to £182m in its first half, helped by good sales of products, such as the range from former Clothes Show presenter Caryn Franklin. Gok Wan has also recently been recruited to design a range of corsetry, N Brown said.
Menswear sales were "exceptional", according to N Brown, up 24 per cent to £26m.
The full article contains 812 words and appears in The Scotsman newspaper.
