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Thursday, 19 October, 2000, 12:04 GMT 13:04 UK
Arcadia plunges into loss
Arcadia
Arcadia is closing Principles for Men
The UK's second largest clothes retailer, Arcadia, whose brands include Top Shop, Burtons and Warehouse, has plunged into loss.

The group, whose stock market has slumped by 90% in two years, reported a pre-tax loss for the full year of 8.5m.

That excludes 144.5m of one-off costs to cover a huge store closure and relocation programme, called Brandmax.

In the previous year the company made pre-tax profits of 41.8m.

Arcadia is one of the mid-market retailers - alongside Marks & Spencer - which has been hit by price deflation and increased competition on the high street.

Rent bill

The rise of discount clothing chains, and excess selling space, has forced cut throat competition, made worse for the mid-market as shoppers go upmarket or bargain hunting.

Added to this has been a huge 312m bill to rent stores, with leases which can only be revised upwards.

Arcadia's response in April was to announce plans to sell off 400 stores, scrap Richards and Principles for Men completely and to have more than one of its brands in many of its stores.

It has now added a further 55 outlets to the list to be scrapped.

The company's loss came despite a 28% rise in total sales in the year to the end of August to 1.96bn from 1.53bn in 1999.

But its shares rose 5p, or 12%, to 45p in early trading as investors saw some light at the end tunnel.

Zoom impressions

The company, said that the second half of the year had seen sales for on-going brands rise 23.3% to 873.2m, with profits of 18.1m compared to 4.2m in the first half.

Sales for the seven weeks since the year end were up 3.3%, with its gross margin ahead of last year.

The company, which has 10% of the Uk clothing market, added that it was too early for current trading to be indicative of the outcome for the first half, given changed Christmas shopping patterns.

It said its 50% owned internet venture, Zoom, had 13.5 million page impressions in August.

Arcadia's online stores recorded sales of 3.3m for the year, compared to 1.5m the previous year.

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See also:

20 Jan 00 | Business
Clothes stores feel the chill
16 Mar 00 | Business
Zoom enters free net fray
13 Apr 00 | Business
Arcadia ditches jobs and shops
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