Property, Mortgage & Insurance News from the Best Deal 4 U

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Retail tycoon criticises UK banks

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Wednesday, October 22, 2008 11:31:27

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Sir Philip told the BBC that banks had been too keen to give out loans.

His comments came as his Arcadia fashion group - which owns Topshop and Miss Selfridge - reported a 6% fall in annual operating profits to £275.3m.

Sir Philip also said it was unlikely Arcadia would buy UK shops owned by Iceland's Baugur for the time being.

'Tough market'

While Sir Philip implied that the current economic downturn was not yet as severe as in the early 1990s - due to the double-digit interest rates at that time - he said retailers were "all going to have to work harder" to weather the storm.

During the year Arcadia saw like-for-like sales - which strip out the impact of new stores - fall 2.8% from 2007, indicating the slowdown in consumer spending.

"It's a tough market place," said Sir Philip, saying that he considered the results at Arcadia - which also owns Burtons and Dorothy Perkins - to be "pretty good".

He said sales growth had been strongest at men's clothing retailer Top Man, and he added that he was pleased with the group's continuing overseas expansion, saying it now had more than 500 stores across 32 countries.

Criticising the methods of UK banks in recent years, he said "basically, borrowing as we know was too easy".

To ease matters, he said the government and banking authorities should help to ensure that the banks were not too quick to repossess people's homes.

"There has got to be a very close look at what we do with mortgage arrears, what do we do with home owners," he said.

"There has got to be a work out period."

Icelandic interest

Sir Philip recently visited Iceland to explore the possibility of buying a stake in struggling Icelandic investment group Baugur, which owns UK retailers House of Fraser, Karen Millen and Hamleys.

With Baugur currently affected by the turmoil in the Icelandic business sector, Sir Philip said that while nothing had been agreed so far, he remained interested.

"It is probably a little bit too early… there are political issues... it is quite complex," he said.

"We may do [a deal]. We are ready to do this if we think it is still the right business for us."

"We have still got our net out."