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Tough economic climate will be 'acid test', Green tells World Retail Congress

'Too many people are driving down the price route in fashion retail,' Arcadia and Bhs boss Sir Philip Green told the World Retail Congress in Barcelona yesterday.

Green said that approach "was not going to be all things to everyone" in the current trading climate. He said: "You will need to be differentiated and a lot of hard work will need to be done on content. You have to have something different to give [customers] a good reason to visit you."

He told delegates that today's trading climate would mark out the strongly led businesses from the weak. "When the market is like it is now, this is when you really get to see whether your people are with you. It will be the acid test for what really is a good business.

"Everybody has had a really good run for the past ten years. You don't have to have been Einstein to have made money in retail, now we're going to see who's going to be able to keep hold of it."

Millard "Mickey" Drexler, chairman and chief executive of J Crew, who shared a platform with Green at WRC, said he knew that the UK entrepreneur's plan to take Topshop to the US, where it is due to open on October 10, was bound to be a success. He said: "We don't need a Topshop in New York but the reality is that people love Topshop in New York, it's got this mythical reputation."

Green confirmed that Topshop and Topman were the key brands within his stable that he felt had potential to become global businesses over the next three to four years and mentioned that "if we can open one flagship rather than hundreds of shops in capital cities, that is going to be the way to go."

Green already has 420 stores overseas in 30 countries. He said: "In some countries we want to be an owner-operator, in others we will want to run franchise businesses where we don't know the market and we don't want to be exposed to the risk."

"I would like to think that we have the best flagship in the world in Topshop at Oxford Circus. When I bought it in 2002 it was turning over £60 million and sales will be towards £150m in the current year. On a worldwide basis, it would be hard [for another retailer] to match the sales per square foot we achieve at that store," said Green.

When asked which retailers he most admired, Green named Inditex founder Armancio Ortega. "I don't know Mr Ortega personally but if there was any business I would like to own in terms of the model, it's Zara. It's an exceptional model in terms of the creativity and in terms of the speed at which they move." Green said he was in awe at the rate at which the business had grown.

Drexler said retailers who had a stake in their businesses did a better job. "Great retailers tend to be owners of companies or owners of stakes in companies. Most of them are not employees."

Green agreed and said: "There has been an awful lot of financial engineering done at retail businesses which takes away from the focus on leadership. A retailer needs an owner or a believer in the businesses who can take its people with them on a journey."

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