Sep 12, 2019

Topshop widens full-year loss to £500m

Losses at Topshop, once considered the jewel in the crown of Philip Green's Arcadia group, widened to £498m for the year to September 2018 after taking significant exceptional charges relating to property leases and brand value. The company accounts for around half of Arcadia's overall sales and along with six other group entities has used insolvency procedures to secure lower rents at many of its UK stores. Revenue fell 9 per cent to £847m, leading to an operating profit of £51.3m. However, that was before £100m of provisions for onerous leases, an impairment charge of £193m against the value of the Topshop and Topman brands, and a write-off of £161m of debt owed by other group companies. Topshop is dependent on financial support from its parent entities and if the group's restructuring does not go as planned, that support may not materialise. In return, the Green family injected additional assets into the company's pension funds and provided a £50m interest-free loan to the group.

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