Arcadia ditches jobs and shops

Arcadia wants to focus on womenswear

UK retail group Arcadia has announced that it will close two chains with 654 Principles for Men and Richards stores and at a loss of 3,500 jobs - but promises to open 300 new shops.

The troubled retailer will close down 24% of its shops, refocus its business completely on womenswear and hopes that this will result in cost savings of £160m.

The restructuring of the UK's second-largest clothes retailer will cost some £90m.

The group was given some breathing space after banks agreed to extend credit lines by three years.

Group chief executive John Hoerner said: "We are forgoing turnover but this will be more than offset by lower costs and higher density."

During the past two years, Arcadia had to issue two profit warnings.

Shareholders are feeling the pain acutely. Arcadia's stockmarket value has fallen from more than £900m to just over £90m. The firm's shares have underperformed the sector by more than 70% over the past 12 months.

As the group plunged into the red during the first six months of the financial year, dividend payments have been suspended.

Pre-tax loss was £60.8m compared with a profit of £26.3m a year earlier.

Arcadia is the UK's number two, just behind that other troubled chain, Marks and Spencer.

The group operates more than 2,600 stores. Among its 16 brands are names like Dorothy Perkins, Hawkshead, Principles, Racing Green, Topshop, Topman, Miss Selfridge, Evans, Burton Menswear, Principles for Men, and Wallis.

Until two years ago Arcadia was called the Burton Group, but changed its name after it sold off Debenhams.