China is “on the agenda” for Sir Philip Green’s empire, with the Arcadia boss admitting “it’s evolution, not revolution” for the UK market.
China in particular, and Asia more generally, are high on the list of territories Green plans to conquer in the short-to-medium term, although he revealed no specific time-table.
International expansion is driving growth for the business. Arcadia opened its first store in South Africa this week, and is planning to grow “considerably” in the US, on the back of 14 Nordstrom concessions opened this September and three standalone stores. A forth will be opened in LA next spring.
Green told Drapers: “Considering the size we are in the UK, it’s evolution not revolution. We are reshaping the business with some smaller shops, some bigger, and some closures.
“In the UK we have to work harder to readjust our portfolio over time, but we can grow in America considerably – and we haven’t even started with Asia, we haven’t done China.”
Regarding China he added: “Something has to turn up that we love and then we can start the car up.”
Green was speaking with Drapers on the back of Arcadia’s results, published this week, show pre-tax profit before exceptional items rose to £166.9m. Improved margins equated to £32m, accounting for virtually all of the 25% growth.
UK like-for-likes were down 3.2% in the year to August 25, while total like for likes fell just 0.7%. E-commerce sales were up 22%.
“[The UK] is a very competitive market place – we can’t our put prices up so we have to keep ensuring we have fresh, new product, that we are quicker to the market.”
Arcadia has exited 60 stores during the financial year, from both prime and secondary locations that Green said had become “too expensive” to maintain. The results referenced exceptional items costing £63m, which were described as “certain onerous leases within the store estate”.
The business will continue to come out of stores, although Green insisted he would also consider opening stores if the “right opportunity presents itself”.
Although he declined to break figures down, Green said Topman was the best performing brand, noting that Miss Selfridge and Topshop had also had good years.
The remaining Arcadia brands “are in recovery”, he added, with Evans benefiting from renewed product. Of BHS he said: “We are in repair there, after a couple of bad years.”
“All the brands are improving in different ways, and continue to improve,” Green said.