Sir Philip Green talks up empire but warns of retail woes ahead

RETAIL tycoon Sir Philip Green said yesterday his Bhs/Arcadia is now among the biggest privately-owned clothing chains in the world as he unveiled plans for an international roll-out of his stores.

Green said he wants to expand into Asia, Australia and South Africa and revealed he had received an inquiry from Kazakhstan.

His stable of brands, which includes Topshop, Burton and Dorothy Perkins, generated a cash surplus of 386.2 million, which was 42.8m more than the previous year. "That must put us in the top three, four or five in the world among privately-owned clothing businesses", he said.

The group has opened a Topshop in Manhattan and has said there are plans to roll out further branches in Chicago, Los Angeles, Miami and New York.

The retailing empire drove operating profits up 10.4 per cent to just under 280m in its latest trading year, but yesterday also warned of tough trading ahead. Billionaire Green said 80 billion of public-sector cuts, a VAT rise in January and increases in the cost of raw materials would squeeze the high street.

"You have to be concerned that people are going to be even more discerning than they have been. It's natural. I think the assumption is it has to get tougher," he said.

Green's comments came as the Office for National Statistics revealed retail sales volumes rose 0.5 per cent in October, reversing two months of declines.

That contrasted starkly with figures released by the Scottish Retail Consortium earlier this week showing a 1.8 per cent fall in October sales volumes. And the ONS said Britain's annual high street sales growth slipped into negative territory, down 0.1 per cent, for the first time since January.

Green highlighted Topshop and Topman as the star turns of the Arcadia group of companies.

But figures for the individual chains were not broken out in the results from Taveta Investments, the holding company for Arcadia and Bhs. Pre-tax profits rose 6.4 per cent to 213.2m in the year to end-August.

Green bought Bhs for 200m in 2000, Arcadia for 850m in 2002, and also made a failed takeover approach to Marks & Spencer in 2004.

However, he said yesterday that there were no potential takeover deals that excited him. "We haven't seen anything we want to do," Green added.