Bhs stores report weak numbers

Published on Thursday 4 October 2007 12:01

SIR Philip Green, the billionaire tycoon behind the Bhs chain, has denied himself another dividend after the retail group managed just a three per cent rise in operating profit last year.

The 100-strong chain, which has outlets on Princes Street and at Cameron Toll, banked an underlying profit of 50 million in the year to March 31 on total sales that were up 1.4 per cent to 872.5m, although like-for-like sales were down 1.5 per cent over the period. No breakdown of regional performance was available.

The overall improvement, coupled with a three per cent jump in same-store sales over the latest six weeks was "a good platform" from which to move forward, the firm said.

Sir Philip, whose clothing empire also includes the Topshop and Burton chains, said: "The results for the last financial year show a small improvement over the previous year, giving us a good platform from which to develop."

However, Sir Philip, who in 2005 famously paid himself a 1.2 billion dividend, said he would not be taking any dividend again this year after adopting the same stance last year. "We don't need the money. We're investing in the business and we continue to do that," Sir Philip said.

Over the previous year, Bhs had reported a 54 per cent drop in operating profit to 48.5m as mistakes within the company's womenswear business hit margins and sales, when like-for-like sales were down 7.1 per cent.

Bhs, which launched in London in 1928, said its operating margin had risen by 0.1 per cent to 5.7 per cent in the latest year.

"The market remains competitive and underlying cost growth continues to be challenging," noted Sir Philip, who bought the group in 2000 from its previous owner, Storehouse.

A number of British retailers have struggled as debt-laden shoppers faced higher interest rates, and the wettest summer on record made life particularly tough for clothing retailers.

Last month, Bhs rival Next's chief executive Simon Wolfson said that as far as he was concerned, the retail environment was getting tougher, with the recent interest rate rises yet to filter through.

Department stores group Debenhams also issued a warning last month of tough trading conditions.

Encouragingly, though, Sir Philip said Bhs was beginning to reap the benefits from a revamp of the chain's stores, with results "very encouraging" from the overhaul of 13 completed stores so far, where sales are 12 per cent ahead of the rest of the store estate.

A further six outlets are being revamped and are expected to be finished by the end of the month.

"Subject to the final quarter's trade, our plan is to accelerate the refurbishment programme in the New Year," Sir Philip added.

Seymour Pierce analysts said in a note: "If this doesn't turn out to be Bhs' year, next year almost certainly will."