British billionaire Philip Green, owner of the Topshop-to-Bhs Arcadia retail conglomerate, said UK consumers can expect store groups to continue to slash clothing prices in the run-up to Christmas as they attempt to shift winter stock left by unseasonably warm weather.
It's been the hottest October and November in history. Nobody can deal with that. Winter goods are tough, he told Reuters in an interview at his flagship Topshop store on London's Oxford Street.
It's 13 degrees centigrade difference in temperature today (Wednesday) than a year ago on the same day, he said.
Typically October, November and December are the months when clothing retailers look to sell some of their most lucrative lines, such as knitwear, boots and shoes and winter coats, at full price.
However, retailers, such as Debenhams
Green anticipates no let-up to the discounting environment before Christmas.
How can it and why should it? Everybody's trying to get out their winter goods, he said.
Monaco-based Green was speaking ahead of the publication of his firm's year to end-August results on Thursday, which showed pretax profit fell 38 percent.
Arcadia, which also owns the Topman, Burton, Dorothy Perkins, Miss Selfridge, Wallis and Evans brands, also updated on current trading. Sales at stores open over a year, including VAT sales tax, were down 4.4 percent for the first 12 weeks of the new financial year.
CONSUMERS MORE FINANCIALLY AWARE
Green is optimistic inflation will fall in 2012 but does not expect a material change in the UK consumer's mood.
I don't see it getting any worse but I think where we are is people are much more constrained on a general basis by necessity, he said.
I do believe everybody today is more financially aware than they've ever been in their life.
Green, who was knighted in 2006 and last year published a government-commissioned report on efficiency savings, said UK consumers needed some help from government.
The bottom line is something needs to happen doesn't it? But I don't know what they (government) have to give, he said referring to the current state of Britain's budget deficit.
In the current tough environment retailers had to act quicker and be smarter.
You've just got to keep thinking outside the box. That's what we normally do and hopefully we'll have a couple of rabbits in our hat, said Green.
The 59-year-old entrepreneur, who bought department store chain Bhs for 200 million pounds in 2000, Arcadia for 850 million pounds in 2002 and has twice tried and failed to buy Marks & Spencer, said his deal making days were not necessarily behind him, although nothing currently excited him.
I haven't seen anything that I love. If I saw something I love that I thought was cheap I suppose we'd have to have a look at it, he said.
Green's family ranked thirteenth on the 2011 Sunday Times rich list with an estimated fortune of 4.2 billion pounds.
Arcadia is one of the biggest private employers in Britain, with over 44,000 staff in 2,507 stores. It also has 600 franchised outlets in 36 countries.
A second flagship U.S. Topshop store was opened in Chicago in September and a third will follow in Las Vegas in March, with possibly Los Angeles to follow.
Green thinks the overall Topshop business can double in size in four years and is keen to open in China in 2012.
He said Topshop will open its own stores in China rather than franchises.
I want to make the money, I'm not going to build a 500 million or billion dollar business for somebody else, he said.
(Editing by Mark Potter)