Arcadia posted large losses and sales fell, while costs occurred from its battle with landlords bit into profitability, its latest full-year accounts disclose.

The accounts for the 53 weeks to September 1, 2018, posted today on the Companies House website, show the struggling retailer reported losses before tax of £177.3m, down from a pre-tax profit of £53.5m the previous year.

The group also saw turnover fall 4.5% to £1.8bn for the period, down from £1.9bn the previous year.

Arcadia’s EBITDA also plummeted by 29% down to £137.9m, driven by the retailer incurring what exceptional costs during the period of £217.1m, which it blamed on “fixed asset impairment and provisions for onerous leases”.

The accounts lay bare the challenge for Sir Philip Green and his senior team as they bid to turn the ailing fashion giant around. 

In the introduction for its accounts, Arcadia pointed out the difficult operating conditions on the UK high street but struck a bullish tone about its future.

It said: “The retail landscape has changed dramatically over recent years and the increased competition from other high street and online retailers, in particular, has had a significant impact on our performance.

“We have some of the greatest brands in the fashion market and we are confident that we will deliver on our plan, improve the way we work, and win hearts and minds of more and more of our customers.”

The document also touched on Arcadia’s controversial CVA, which it managed to push through at the second time of asking in June, despite the protests of a number of landlords.

The CVA will result in the closure of 23 stores across the Arcadia group and rents being cut on the leases of nearly 200 others.

In exchange, shareholder Lady Tina Green, wife of Sir Philip Green, agreed to invest £50m in the group and provide an additional £100m of cash into its pension scheme to bridge shortfalls in contributions.

Last month, Arcadia settled two legal challenges from US landlords to its CVA.

It has been recently reported that Arcadia chief executive Ian Grabiner has convinced Green of the need to break up the Arcadia empire – which includes both Topshop and Topman, as well as brands such as Miss Selfridge, Burton, Dorothy Perkins and Wallis – in order for it to survive.

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