Topshop owner reports slide in sales

The first Topshop store in Hong Kong
Image caption Topshop stores are opening around the world

Arcadia - the firm that owns Topshop, BHS and Miss Selfridge - has reported a fall in annual sales and says trading conditions "remain challenging".

Like-for-like sales - which strip out the impact of new store openings - fell by 2.7% in the year to 31 August.

The firm also said like-for-like sales over the past 10 weeks were down 3.7%, with trading hit by the milder weather.

Pre-tax profits were £481m for the year, but this was boosted by the sale of a 25% stake in Topshop and Topman.

Stripping out one-off factors such as the stake sale, underlying profits were £167.8m, up slightly from £166.9m the year before.

Milder weather in the past few weeks has hit sales of winter clothing across the retail sector - a factor noted by the UK's Office for National Statistics (ONS) when it released retail sales figures for October.

The ONS said retail sales volumes in October had fallen by 0.7%, with clothing sales down 2.8%.

Europe focus

Arcadia chief executive Sir Philip Green said he was pleased with the results, given the "ongoing challenging global economic conditions".

He said there had been "further significant investment" in the business throughout the UK and overseas in the past year.

Europe had become a "significant focus" for Arcadia, Sir Philip said, adding that further Topshop and Topman stores would also launch in the US.

Outlets of the British fashion label opened in Paris, Amsterdam, Los Angeles, Hong Kong and across Germany in the past 12 months.

Arcadia sold a 25% stake in the Topshop/Topman business in December 2012 to a US private equity firm for £350m.

Sir Philip took over Arcadia Group in 2002, paying £850m for the group after buying BHS for £200m two years earlier.

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