Topshop is the latest retailer to have suffered a blow from harsh conditions on the street after posting losses of millions of dollars a pound in the last fiscal year.
The retailer’s parent company Arcadia Group which belongs to the family of sir Philip green and includes both topshop and topman made £10.9 m loss in the year to August 2017, compared with £59.4 m profit a year earlier. Sales fell 6 £ 933.6 m, according to accounts filed at companies house.
Like many other high street retailers, networks, fashion fights amid the gloomy conditions in the retail sector as consumers restrain spending, while the costs of doing business are rising.
Topshop also took a £12.6 m hit this year, due to impairment of fixed assets and provisions for onerous lease agreements.
Retailers provide for onerous leases when the rent no longer covered by the income of the store. Topshop had to raise its provision unprofitable new stores from € 730 000 to £4.2 m.
The figures come a few days after sir Philip’s Taveta investments, the company behind the Arcadia group of fashion brands which include Burton menswear, Dorothy Perkins, Evans, Miss Selfridge, outfit and Wallis, reported a 42pc decline in operating profit to £124.1 m in the same period and 5pcs slide in sales.
Taveta investments closed 41 stores if the lease came to an update at the conclusion of the lease for another 25. Its property store is now about 2,800 worldwide.
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Ian Grabiner, Executive Director, Taveta, said online sales are growing at the expense of traditional brick-and-mortar retailers.
“The retail sector remains high competition,” he said. “While we [Taveta investments] found the sales header and disappointing profits, we remain highly cash generative business and has had positive net cash balance at year end £157.2 m.”
The growing popularity of online shopping hurt many traditional retailers who are trying to compete and have difficulty adapting to the digital retail or a profit from online sales, which can be significantly lower than the sales margin in the store.
It was a very difficult week for the high street. Marks & Spencer confirmed the closure of 14 stores as part of a major restructuring program that ultimately will result in 100 closing the store for the next four years.
Tesco, meanwhile, said Tuesday that he was closing non-food website Tesco direct, putting about 500 jobs at risk.
Several other retailers, including new look, along with the Italian restaurant operators and hotel Jamie, have closed branches this year, while toys R us and shop gone bust with the loss of about 6,000 jobs.