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Philip Green to revamp Arcadia
Sir Philip Green is planning a major revamp of his business empire that will include spending £370m growing both the Arcadia and Bhs operations over the next three years. Green said he had reviewed all of his fashion brands and concluded many of the older stores needed attention. That means around £80m a year will be spent on Arcadia-owned stores, while Bhs will get £40m a year, with Green saying each business would receive investment in proportion to its size and profits.
Much of the expenditure will go on Topshop, the biggest brand within the Arcadia stable. Twenty Arcadia stores will open over the next 15 months, while 10 Bhs outlets will receive a facelift this August. While news of the review had earlier fuelled speculation that the struggling Bhs chain could be put up for sale, Green scotched such rumours: "I have no intention of breaking this business up. As of today we are not in discussions with anyone about selling it," he told The Daily Mail.
1 June 2007
Arcadia profits fall
Despite a drop in operating profit of 8.1 percent to £300.6 for the year ended 2 September, retail tycoon Sir Philip Green remains upbeat about Arcadia Group's performance. "Our operating margin at 16.7 percent is still among the best in the industry," he said. Group sales rose 1.8 percent to £1.8 billion, while like-for-like sales dropped 1.9 percent. Pre-tax profits fell £24.3 million to £357.5 million. Green maintained the results were buoyant despite a challenging retail climate. "This represents a strong performance when set against a competitive retail market, significant investment in new space by our competitors, and underlying costs inflation for retailers." Richard Ratner, analyst at Seymour Pierce, said that the result was "pretty decent given the environment."
The group opened 46 new outlets during the year. Green said capital investment, including new stores, refurbishments and e-commerce, had increased from £65 million to £123 million during the year. He added that the company had already committed £30 million of capital investment this year.
The group's top performers were menswear chain Topman and Wallis, with Arcadia 's best known brand Topshop continuing to give a strong performance. Arcadia recently announced the resignation of Jane Shepherdson, brand manager for Topshop. Shepherdson was credited with turning the brand into one of the most coveted labels on the high street. At the time, both Green and Shepherdson did their best to blast the rumours that her departure had anything to do with the signing of supermodel Kate Moss to co-develop a line for Topshop. Meanwhile, the Miss Selfridge chain suffered a loss of £3 million and last month, department store Bhs reported that profits for the year to May had almost halved, while sales dipped 1.8 percent to £860.5 million.
This year Green will be waiving a dividend pay-out. Last year, he paid his wife a dividend pay-out of £1.2 billion, after Arcadia outperformed the market.
27 October 2006
Topshop resumes US expansion plans
Following the settlement of a suit over the name Topshop, the British retailer is resuming its expansion plans in that country. Last month, New York-based women's apparel company Nevada Apparel Corp sued parent company Arcadia Group. The company claimed it owned the name in the US . The group managed to settle the litigation for an undisclosed amount, with Nevada transferring all its rights to the British group. The court has approved the settlement. "We are now in control of the brand," Green told WWD. "But what this litigation did was to reveal the vast amount of interest from all sectors in Topshop coming to America ." Topshop had been planning to open a US store, most likely in New York , next spring. It would follow up with more store openings in the US . However, although Green had said in June that a potential site had been found for the store, which was to cover 60,000 to 90,000 square feet, the search for a new start will have to be restarted. "We are still at the inception stage of the search, so at this time there is no news on developments," said a presswoman for Topshop. Green said that he opens to open a store in the US within the next year, but is not yet sure if it will be in New York or another city. "There are points for and against," he said. " New York has an element of safety but some experienced US retailers tell me it isn't a good proving ground for the rest of the US . But what we have received over the last few weeks is significant interest from major US retailers in partnering with us in the US . We are thinking that they could take a 10 to 20 percent interest in the American operation and help us with such things as staffing and logistics and we are prepared to discuss that."
Karsten confirmed that there are plans to launch a new platform for the Topshop website. According to Green, the new version will allow overseas customers to buy from the site as well and should go live before Christmas. More will become known about this in the coming weeks.
31 August 2006
Arcadia Group to extend supplier terms
The Arcadia Group is not making itself more popular amongst its suppliers. The Group, which counts Topshop and Miss Selfridge amongst its high street chains, will extend its supplier payment terms from 30 - 60 days from the 1 st of August.
The company will also impose an additional 1% discount on all product from landed UK suppliers. The discount for Evans, Dorothy Perkins, Miss Selfridge, Outfit, Topshop and Wallis will increase to 14.25%, while Burton and Topman discounts will rise to 11.25%. Arcadia group finance director Paul Budge said the restructure was necessary to maintain the company's market share and point of difference.
25 July 2006
Arcadia sees departure of top directors
Arcadia, the Topshop to Burton retail group owned by Philip Green, will see to of its top directors leave, in the first big change to the group's structure since Green's takeover. Kim Morton, the human resources director, due to leave next month, will not be replaced, while Mr Green said that he would look for a new finance director with retail experience to replace Paul Budge, who will leave the company this year.
The two directors, who have both been with the company for more than ten years, join a number of high-level departures from Arcadia in recent months. These include Clem Constantine, the former property director, who is now in the same role at Marks & Spencer, and John Lyttle, the buying director at Burton, who is moving to the same job at Matalan. Jenny Langley, the buying director for Dorothy Perkins, is set to leave this year, while industry insiders say that Frances Russell, the brand director of the Evans chain, is also keen to leave.
However, according to Drapers, the fashion trade magazine, Ms Russell has had a "change of heart" and remains in her post. Mr Green would not comment on whether Ms Russell wanted to leave, saying: "She's still there." He added: "We employ 43,000 people and people come and people go. That's the industry. Everybody thinks we must be a good training ground and want to pinch my staff. However, retail insiders said that several more staff at Arcadia were considering their positions after a generous three-year bonus plan put in place by Mr Green matured in November last year.
According to the BBC, one source said: "A lot of people have been there a long time and have enjoyed a substantial payout, so they are saying: 'I'm off.' " Mr Green stated he had paid out £95 million in bonuses since buying the company three years ago and that the latest departures were not linked to November's payouts. He further added: "A couple of people are leaving - big deal. In the meantime, people have done a good job and got well rewarded." He pointed out that Arcadia continued to expand, with new large stores in Manchester and Bromley opening this month. "Last year we made about £330 million, three times what it made when it was sold to me," he said.16 April 2006
Arcadia Group to increase pensions contributions for staff
Philip Green, the retailing billionaire, found himself on a collision course with Britain's trade unions last week, after announcing plans to force hundreds of his employees to either work longer and increase their pension contributions, or take cuts in their retirement benefits.
The move comes just months after the tycoon paid himself a £1.1bn dividend from the profits of his Arcadia fashion empire - which includes high street chains such as Topshop, Burton and Miss Selfridge - but made no additional contribution to the group's final-salary pension scheme.
Changes at Arcadia are due to come into force in March, just months after boss Philip Green awarded himself a £1.2 billion dividend from the firm, which owns Burton, Dorothy Perkins, Top Shop and Miss Selfridge.
Arcadia will raise its standard retirement age from 60 to 65 and at the same time has told staff they must lift their contributions from 4 per cent to 6 per cent of their salary or see their future payouts fall.7 January 2005
Green pays himself £1.2bn dividend
Retail billionaire and owner of Arcadia, Philip Green has paid himself a £1.2 billion dividend, which is more than three times Arcadia's annual operating profits, reports the FT.
Green, who controls 92 percent of the Arcadia Group shares, will pay the group's shareholders a total of £1.3 billion in dividends. HBOS, which helped him finance the £850 million takeover of Arcadia in 2002, will receive the remainder of the payout, which will be financed from the group operational debt which increased from £265.8 billion last year to £1.35 billion this August.
Arcadia saw its operating profits before goodwill increase 10 percent to £326.1 million on sales of £1.77 billion. Like for like sales rose 1.3 percent in the year ended 27 August. The group said that the retail climate on the high street remained "challenging and extremely competitive". It revealed a rise in turnover of 3 percent since August, compared with the same period last year.
"This performance has given us the confidence to both pay the dividend and, more importantly, continue the high level of investment in the business," Green said in a statement.
24 October 2005
Arcadia Group sees high street increase
Arcadia Group has posted a small rise in annual profits as conditions on the High Street continue to challenge retailers. Pre-tax profits at the privately held group rose to £252.79m, compared to profits of £246.33m last year. Philip Green will get most of Arcadia 's final share dividends of £1.3bn as he owns 92% of the firm which includes Top Shop, Dorothy Perkins and Etam.
The balance will go to banking group HBOS, which owns the remaining 8%. The bank backed Mr Green's £850m purchase of the business in 2002. Mr Green's interests are partly held by his family. Operating profits at Arcadia rose 10.1% to £326.1m, but current trading conditions were described as challenging. "I am delighted to announced that our third year, since acquiring the business in October 2002, has again produced an excellent set of results," said chairman Philip Green.
20 October 2005
Philip Green To Acquire Etam
Mr Green's Arcadia Group has more than 2,000 outlets across the UK. UK retail entrepreneur Philip Green is to buy fashion chain Etam, in a deal thought to be worth £10m. The Arcadia Group currently has more than 2000 outlets in the UK.
Mr Green confirmed he would be buying the chain's 213 UK stores from French owner Etam Developpement. He told news agency AFX that the buy was a "strategic fit" for his business, but declined to say how much he was paying for the business.
Etam UK - whose brands include Etam, Tammy and Emily May - posted a £25.9m ($48.5m) loss in 2004. The buy follows Mr Green's failed £9.1bn bid to buy High Street name Marks & Spencer last year. The billionaire is owner of Arcadia Group, which includes High Street store chain BhS, and the store brands Wallis, Burton and Top Shop.
8 April 2005
Philip Green Passes Arcadia To Wife In Tax-Saving Bid
Philip Green appears to have formally passed control of Arcadia, the Top Shop and Dorothy Perkins chain, to his wife Tina. According to The Guardian, the new ownership structure will save the Green family £150m in tax that would otherwise have been payable on the £460m dividend the retail group is paying them this year. If the same structure is applied to Mr Green's Bhs stores group it will generate a further £130m tax saving on the £400m dividends the business has paid to the Green family over the last three years.
Mr Green is a UK taxpayer, however his wife is resident in Monaco. If Mr Green controlled Arcadia through a Jersey trust and corporate structure the Inland Revenue could tax any dividend payments he received irrespective of where they were paid. But with Mrs Green having control of Arcadia, her Monaco residency means the dividends paid from that group will avoid any tax liability for the family.
"If his wife is the trust settlor in Jersey and she is Monaco domiciled then there is no tax to pay on the dividend," one tax specialist said. But Mrs Green has been closely associated with the Arcadia deal from the outset. The offer document for the acquisition said: "Taveta Limited is wholly owned by Philip Green's family who will make their investment in Taveta through Taveta Limited. The only director of Taveta Limited is Cristina Green.
There is now a question over the ultimate control of Mr Green's Bhs stores group. Its most recent accounts, for the year to March 2004, report: "P Green and his immediate family are the ultimate controlling party of Bhs Group." The controlling shareholder is Mr Green's Jersey based Global Textiles Investments. Bhs has channelled almost £400m in dividends to Jersey for the Greens over the last three years. The tax bill on those payments would be approaching £130m if Mr Green rather than his wife were the ultimate controlling party.
3 November 2004
Record Results For Green's Arcadia
Philip Green has been celebrating record results for his Arcadia retail empire. He announced annual operating profits up by 30 per cent to £296.3m - and that he was looking to repay loans early. Although like-for-like sales were slightly lower, results for the seven weeks since the year end showed an improvement of 3.1per cent. Mr Green also revealed he was closer to clearing his borrowings on fashion chain Arcadia, well ahead of schedule. He plans to reduce his bank debt from £400m to £120m by the year end.
The billionaire borrowed £808m from HBOS to acquire the Top Shop to Burtons group two years ago, with a six-year repayment period. "The market remains challenging but we are confident that further progress can be made with our world-class brands," said Mr Green. Shareholders - largely Mr Green and his family - joined the boom and will receive £500m.
Analysts expect the cash to be added to his 'war chest' for funding other retail deals. This summer, Mr Green failed in a £9bn bid for Marks & Spencer. Mr Green's family collected £40m in dividends from the department store group Bhs earlier this month and increased the pressure on M&S with healthy sales for the period since August.
21 October 2004
Arcadia Group Shares Worth GBP 3bn
Shares in Arcadia, the clothing stores group bought by Philip Green two years ago for GBP850m, are now valued at more than GBP3bn according to a filing made yesterday at Companies House and reported by the Guardian newspaper. The annual accounts for Arcadia Ltd, formerly Arcadia Group plc until the company was taken private following Green's acquisition in October 2002, reveal that shares in the trading companies were valued at GBP3,019,803,000 at August 30 last year.
Arcadia Ltd has taken advantage of Companies Act rules which allow it not to disclose all of its group undertakings. However, the accounts list a number of direct and indirect holdings in its principal subsidiaries, including Burton Retail, Dorothy Perkins Retail, Evans Ltd, Miss Selfridge Retail Ltd, Top Shop/Top Man Ltd, Wallis Retail Ltd, and the Redcastle property business.
A note to the accounts states: "In the opinion of the directors the aggregate value of the company's investments in its group undertakings is not less than the amount at which they are stated." The headline figure for the investment in trading companies is significantly higher than the value for Arcadia as a whole because the carrying amount in the balance sheet must be offset against amounts owed by the subsidiaries to their parent.
The note dealing with amounts due to Arcadia Ltd from its subsidiary companies is incomplete, making it impossible to establish exactly how much is owed. The balance sheet does show an amount of £2.2bn described as creditors falling due after more than one year. Arcadia Ltd also provides administrative and logistical services to its subsidiaries. Management charges levied on subsidiaries during the year generated revenue of GBP114.5m out of a company total turnover of GBP315.2m.
2 July 2004
Customer Loyalty At Bhs
Bhs and Arcadia owner Philip Green will launch a customer loyalty card across the whole of his fashion empire later this year. Retail and marketing executives are revamping the group's Gold Card to add reward points for high spending customers across Bhs and Arcadia. Insiders say the card, to be launched in the autumn, is intended to provide a similar loyalty inducement to those offered by competitors such as Marks & Spencer.
9 February 2004
City sold Arcadia too cheaply,' says Standard Life
City institutions massively undersold Arcadia, the Top Shop to Dorothy Perkins chain bought by Philip Green for £850m last year, according to one of the UK's most respected fund managers.
The damning verdict from David Cumming, the head of UK equities at Standard Life Investments, follows Arcadia's announcement last week of spectacular full year results. Operating profits at the retail chain, which Green bought in October 2002, rose by 95.8 per cent in the year to August 30 to £227.9m on sales up by 3.3 per cent at £1.8bn.
Cumming sees the results as proof that investors were short-changed. "These results confirm that Arcadia was sold too cheaply by the City," he said. Standard Life was one of a number of City institutions that raised concerns last year about the level of Green's bid. The fund manager claimed at the time that the price should have been closer to 500p a share, rather than the 408p eventually paid by Green.
Green dismissed the claims, insisting that he "paid the market price".
28 October 2003
Green Responsible for Turnaround Arcadia
Philip Green has paid back around £500m of the £808m debt that he took on when he bought Arcadia last year. Results to be published this week will show a remarkable turnaround at Arcadia. Green would not be drawn on the financial performance of Arcadia, although he let slip that sales at Top Shop's flagship Oxford Street store are up 15 per cent, providing a possible pointer for the group's overall performance.
Philip Green is further set to deliver a strong trading update for the Bhs and other Arcadia chains this week. Sources at the privately owned retail empire say sales have been strong and profits should exceed £200m this year.
20 October 2003
Burton Launches Trend Collection
Burton will introduce two new lines when the Arcadia owned menswear brand opened its flagship on Oxford Street in London last week.
The store, now trading in the West One shopping centre above Bond Street Underground station, will adjoin a new flagship for womenswear brand Dorothy Perkins.
In addition to the main collection, it will also carry limited edition, directional trend pieces, still carrying the Burton label, updated every week.
In addition, Burton is launching Silver Label, a premium range of shirts, trousers,
knitwear and jackets.
Elements of the new store may be rolled out to other stores as they are refurbished. There are 381 Burton stores and 5578 Dorothy Perkins stores in the UK, of which 201 are joint sites.
Burton has also signed up Blue singer Duncan James to be the face of the brand In a GBP500,000 campaign.
22 September 2003
Arcadia Swaps Miss Selfridge For Topshop
Arcadia is planning to convert its high profile Miss Selfridge and Wallis stores on High Street Kensington into a Topshop.
The company will create a single 5,000sq ft unit to boost Topshop's London presence. Industry insiders suggested Topshop has enjoyed a strong summer, and that it could outperform Miss Selfridge in the more upmarket location because it has been so well adopted by the style press and older, higher-earning shoppers.
It is understood that Arcadia has been considering offloading the Kensington store for more than a year.
Both Miss Selfridge and Wallis are believed to have achieved decent sales, but suffered because of high rent and associated costs.
There has been outside interest in the store in the past but no deals emerged.
22 August 2003
Rags to Rich List
It's been a good year for high street guru Philip Green, who, according to The Sunday Times rich list 2003, is worth an estimated GBP1.85billion. Since buying fashion chain Arcadia group last September, profits are set to reach GBP 150m in the year to August 2003. The Arcadia Group, known to consumers as Top Shop, Top Man and Miss Selfridge are the envy of the high street with multiple outlets spread across the UK. Green, 51, who is no stranger to takeovers, bought BHS in 2000 and can expect the department store's profits to be in the range of GBP 1billion this year.
Next on the list of the richest in fashion are Lady Granchester and the Moores Family of Littlewoods. With an estimated fortune of GBP 1,255m, their retailing and mail order company was sold for GBP 750m last October.
Paul Smith, the most well known of British designers, is worth an estimated GBP 135m. Of his 11 shops, 81 franchise stores and 174 concessions worldwide, turnover is about GBP 233m a year.
May 2, 2003
Green ups takeover bid for Arcadia
Retail entrepreneur Philip Green, owner of the Bhs store group, has launched a second attempt to take over the second largest clothing retailer in the UK, Arcadia, after a first offer was rejected a week ago on the part of Arcadia's board on the grounds that Mr Green had "undervalued the company".
The new offer values Arcadia at GBP 770m rather than the GBP 690m on offer initially. The proposed deal would create the largest UK fashion retailer with approx. 30% market share in the UK clothing market. Arcadia's board said that it is still "considering its response" to the new offer.
Baugur, which was a crucial backer of Green's bid, has been hit by fraud allegations following a police raid on its headquarters late last Wednesday. The Icelandic company Baugur owns 20% stake in Arcadia.
Green is believed to be putting together a new takeover strategy for Arcadia.
According to The Daily Telegraph, Green now hopes to buy Baugur's Arcadia stake.
Arcadia ends talks with Baugur
Fashion giant Arcadia Group Plc said it has ended takeover talks with Icelandic retailer Baugur as it believed it unlikely the firm would raise the necessary funding within an acceptable time. The announcement took the city by surprise as it had expected Baugur to make a formal takeover bid for the company, owner of the Dorothy Perkins and Top Shop retail chains, in the near future. Due to the news Arcadia shares fell around eight per cent. Arcadia added that its current trading was strong.
On January 9 Arcadia received an approach from Baugur hf., which might have
led to an offer for the company. The approach specified a price of 280p to 300p
per ordinary share in cash.
Press Enquiries: Arcadia (020) 7636 8040
01 Feb 2002
Shares Arcadia rise as a result of takeover bid
UK retail giant Arcadia is subject of an investigation by the LS after a possible leak forced it to admit it is in takeover talks. The LSE is reported to have launched a probe into Arcadia share trading prior to negotiations with Arcadia's biggest minority shareholder Baugur which began "a few days ago".
Iceland's largest retail group, might takeover British fashion group Arcadia Group plc. Baugur already has a 20.7 % stake in the British retailer, and is offering 280 to 300 pence per share or GBP 570m (EUR 911.8m) for the remaining 80 %.
The move is not much of a surprise considering that Jon Asgeir Johannesson, Baugur's chief executive, has long been stressing his plans and strong links with the group. In May this year, speculation mounted that Baugur was eyeing Arcadia when it increased its stake from 14.99 % to 20.7 %. Talks were "at a preliminary stage", and there was "no certainty that any offer will result", Arcadia said.
If the deal is successful, Baugur would swallow the fourth-largest European
retailer. Baugur's annual turnover of GBP 220m amounts to approx. 14 % of Arcadia's
turnover, which presently is GBP 1.6bn for its core brands. Baugur seems to
be determined to expand its operations in the clothing industry. The group mainly
deals with groceries, but has franchising agreements with British department
store group Debenhams, Arcadia's Miss Selfridge and TopShop chains and Zara,
the prestigious core brand of Spanish fashion group Inditex. Arcadia's chief
executive, Stuart Rose, would benefit from the takeover. On entering Arcadia
as CEO he negotiated share options of GBP 17m.