Sir Philip Green’s retail empire warns no-deal Brexit could trigger cash crisis

Sir Philip Green’s retail empire has warned that a no-deal Brexit could cause a cash crisis at the group, jeopardising its three-year revival plan.

Directors at Taveta Investments, the ultimate owner of Green’s Arcadia, sounded the alarm as the group posted a drop into the red.

The group plunged to a £169.2 million loss in the 53 weeks to September 2018, compared with profits of £49.4 million a year earlier, according to fresh accounts from Taveta, the holding company owned by Sir Philip’s wife Tina.

The Topshop and Dorothy Perkins owner posted operating profits of £78 million, down from £123 million a year earlier, while turnover fell 4.5% to £1.8 billion.

Directors said they had “stress-tested” the company’s liquidity and covenants against various trading scenarios for the next 16 months.

They said: “There are certain scenarios that could arise in the event of continued challenging and volatile market conditions in the retail sector, including a disorderly exit from the European Union that would create uncertainties around the ability of the group to operate within the liquidity available from existing funding arrangements.”

They added: “Ongoing difficult trading conditions in a volatile retail sector could, in certain circumstances, cause the group to require additional financing in order to provide sufficient liquidity to deliver the three years business and recovery plan.” It is confident it can refinance its Oxford Street flagship store this year. A £310 million property mortgage terminates in December.

The retail group plans to ramp up its online presence over the next three years and has inked digital partnerships with Asos, Next and Very. It also plans to invest in a number of “key stores”.

Since the trading period covered in the accounts, the retail group has agreed a company voluntary arrangement with its creditors which led to widescale job losses and the ongoing closure of 48 of its 570 stores.

Two key figures have left Arcadia, it emerged this week — interim chairman Jamie Drummond-Smith and chief operating officer David Shepherd, a key ally of Green’s.