Arcadia, the owner of popular fashion stores Topshop, has announced it will close 250-260 stores in the UK.
Topshop is mostly sold in New Zealand through its website but does have a presence in Auckland at The Department Store in Takapuna, which is co-owned by Karen Walker.
The British retail group owned by billionaire Philip Green added to the bad news coming from the UK high street by posting a 38% fall in year profit and a further deterioration in recent trading as mild weather deterred winter clothing purchases.
Green told the BBC the stores would close over the next few years as their leases came up for renewal.
The group, which also owns the Topman, Burton, Dorothy Perkins, Miss Selfridge, Wallis and Evans brands, also said it expects to see heavy discounting for Christmas.
It has closed 65 stores over the past year.
Arcadia today reported a pretax profit of 133.1 million pounds ($NZ277 million) in the year to August 27, down from 213.2m pounds (in the 2009-10 year.
Total sales, from 2,507 owned stores and 600 franchised outlets in 36 countries, fell 3.4% to 2.683 billion pounds.
E-commerce sales did, however, rise 27%.
Sales at UK stores open over a year, including VAT sales tax, fell 1.8%, with the group badly hit by last December’s heavy snow.
Margin fell 1.8%age points after the firm chose not to pass on cost increases to customers. That cost the group 52.4 million pounds.
Like-for-like sales, including VAT, were down 4.4% in the first 12 weeks of the new financial year.
“Trading conditions remain extremely challenging, with style, quality and value at the top of our agenda and more important than ever. Additionally, the warmest October and November on record have made Autumn trading much tougher,” said Monaco-based Green.
He said the firm’s young fashion brands Topshop, Topman and Miss Selfridge were trading positively.
Britons have been feeling the pinch as disposable incomes are squeezed by rising prices, muted wage growth and government austerity measures, and as they worry about a stagnant housing market, job security, a fragile economic recovery and the euro zone debt crisis.
I was wondering if Topshop annually made a contract with an infamous designer for the collaboration, they would not have closed 250 stores. When Topshop collaborated with Kate Moss years ago, millions of British people were crazy over buying Topshop clothes. H&M’s collaboration with a luxury brand every year makes people to think H&M positively.