Sales at Sir Philip Green’s Topshop to Burton fashion empire, Arcadia, are reported to have slumped by 16.6% in the 12 weeks to 18 November.
Analyst Kantar revealed the figures, reported by The Sunday Times, which also claims to have seen leaked figures showing that the rate of decline has accelerated to 20%.
The newspaper also interviewed staff at the flagship Topshop store on Oxford street, which has been discounting stock heavily since the end of November. “The sale started on Black Friday [23 November] and it just hasn’t stopped. It’s sort of scary,” one of them told the newspaper.
Reports of Arcadia’s struggles come a week after fashion’s former darling of the stock exchange, ASOS, issued a profits warning after a particularly tough month of trading during November.
The online retailer, which is a major rival to Topshop, said in an unscheduled trading update for the first three months of the financial year that, while it delivered sales growth of 14%, it “experienced a significant deterioration in the important trading month of November and conditions remain challenging”.
As a result it revised down its expectations for the year and said to now expects sales growth of 15% for the year to August 2019, down from 20% to 25%, and its anticipated earnings margin has been revised down from 4% to 2%.
The ASOS announcement spooked the market, given its previous robust performance, and retail stocks were sent tumbling as a result.
Kantar attributes Arcadia’s sales drop to a combination of unseasonably warm weather and a drop in consumer confidence, both of which were cited by ASOS. However the reputational damage to the brands after Sir Philip Green was revealed to have been accused of bullying and harassment by former staff members (allegations he has strongly denied) cannot be ruled out as a contributing factor.