Arcadia Group to reshape portfolio

Arca

dia Group, Sir Philip Green’s retail conglomerate which includes Topshop and Miss Selfridge, is undergoing a reconfiguration of its property portfolio, which could see a downsize of 200 stores stores over the coming three years.

T

he company will use the expiries to seek out new premises, consolidate existing stores or negotiate better leases on existing sites. Arcadia owns a string of high-street fashion retailers, including BHS, Topshop, Dorothy Perkins, Miss Selfridge, Evans, Burton and Topman. Last year, it made £214m of pre-tax profit, up 13 per cent on the previous year, while revenues jumped 2.7 per cent to £1.9bn. Like-for-like sales were flat at the group. At the time, Sir Philip declined to give any performance details for the BHS chain, beyond saying that it was profitable.

In addition to its main UK locations, Arcadia has expanded recently into the US, with a flagship Topshop store opened in New York in April last year. The number of stores to be deducted is still undecided. However, it is possible that between 150 and 200 could be shut. This would be a reduction of some 8 per cent from the company’s existing portfolio of about 2,400 stores.

While commercial rents in Britain have fallen during the past 18 months or so, Arcadia is still concerned about the upward trajectory of small shop rents over the past five years. Brands which have relocated as ‘insertions’ within BHS space include Miss Selfridge, Burton, Wallis and Dorothy Perkins.

This process is expected to continue across the Arcadia estate and, as a result, the company is being left with more standalone stores for its brands than it needs, particularly in regional cities.