Taveta Investments, the holding company behind Arcadia Group, saw operating profits fall 42 per cent from £215.2 million to £124.1 million for the year to August 26, 2017.

Sir Philip Green’s fashion retail empire - which includes Topshop, Topman, Burton, Dorothy Perkins, Wallis, Miss Selfridge and Outfit - did still see pre-tax profits up 45 per cent to £53.5 million, thanks to lower exceptional costs.

However full-year total sales dropped 5.6 per cent from £2.01 billion to £1.91 billion, and the company received a £29 million charge from fixed asset impairments.

Arcadia has closed 41 stores once their leases expired and sought rent reductions on a further 25 thanks to “challenging market conditions” on the High Street. The total store estate, including concessions, now stands at around 2,800 worldwide.

“The increase in digital sales is taking place at the expense of traditional ‘bricks and mortar’ retailing, as consumers embrace the opportunity to purchase across all the channels available to them,” commented Taveta chief executive Ian Grabiner.

“Whilst we have found headline sales and profits disappointing, we remain a strongly cash generative business and had a positive net cash balance at year end of £157.2 million,” he added.

Arcadia is continuing to invest in its distribution network, with a new distribution centre in Daventry due to open in 2019.

Taveta’s defined benefit pension liability was also reduced by £126.8 million to £300 million, after the group made contributions to the pension scheme.

The 2015 sale of British Home Stores (BHS) led to revelations of a £571 million defecit when it collapsed under its new owners a year later. Green has since made a payment of £363 million towards BHS’s pension scheme after facing a grilling from the Work and Pensions Committee.

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