Fashion retailer Arcadia today said that sales across its major high-street stores were on the up despite a “highly competitive” trading environment.
The group is selling off a number of businesses to concentrate on key brands including Top Shop, Dorothy Perkins and Burtons.
It said like-for-like sales across the stores it was keeping increased by 7.1% in the 17 weeks to 23 June. This compares to like-for-like growth of 5.5% in the previous six months of Arcadia’s financial year.
Total sales were up 0.8% but the group’s sales space has shrunk by 11.8% under a recovery programme put in place by its former management.
Arcadia’s chief executive Stuart Rose, who joined the group in November, said all the group’s core brands had improved their performance. He added: “We are encouraged by our trading performance during the second half year to date.”
Mr Rose said plans to sell off Warehouse, Principles, Hawkshead and Racing Green to a management buy-out team were “on schedule”. “You can expect something to have happened by the end of August, but it will not be in the next two weeks,” he said.
Mr Rose put the chains up for sale, along with Liverpool-based designer retailer Wade Smith, in April as he moved to “simplify” the business.
Analysts said Arcadia had suffered from falling margins, as well as selling the wrong product and marking down the price of too many products. Wade Smith has already been sold for £7.5m and it is believed Arcadia could get £15m for the other chains.
Mr Rose said today, however, the key reason for the sale was to focus on its core brands, which also include Burtons, Evans, Wallis and Miss Selfridge.
Sales density across the ongoing concerns increased during the 17-week period and the group’s margin also picked up.
Mr Rose said: “The market has been reasonably strong and retail has enjoyed a little bit of a renaissance. “We must be benefiting from the weakness of some of our competitors like Marks & Spencer, but credit where credit is due, we have done better and we are enjoying higher sales.”
Mr Rose said he remained slightly cautious about the outlook going forward, but that deflation on the high street was easing. He added he was not worried by the prospect of a revival from competitors such as Bhs which has begun to bounce back under the guidance of retail entrepreneur Philip Green.
“The more healthy players the better for everyone,” Mr Rose said.Arcadia reports its full-year results in October. Its shares were unchanged at 286p in early trading today.
They closed at 59p the day Mr Rose joined, from frozen food retailer Iceland, last year.
EGi News 28/06/01
The Press Association
