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INTERVIEW-Philip Green says market rebound overdone

Published 10/22/2009, 02:47 AM
Updated 10/22/2009, 02:51 AM
UK100
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* Sees tough trading for the next 12 months

* Says can't see any retail deals in UK worth doing

* No comment on possible TV venture with Simon Cowell

By James Davey

LONDON, Oct 22 (Reuters) - British billionaire Philip Green, owner of the Topshop-to-Bhs retail group Arcadia, said the stock market had rebounded too far too soon and predicted 2010 would be another difficult year for the sector.

Speaking to Reuters at his offices in central London, Green said any retail recovery would be slow.

"I think the (stock) markets are way ahead of events. I think it's going to be hard work ahead, a long slog," he said ahead of the release of Arcadia's full-year results on Thursday.

The FTSE 100 index has surged about 52 percent from a six-year trough in March.

Green, whose family was sixth in the 2009 Sunday Times Rich List with an estimated fortune of just under 4 billion pounds ($6.62 billion), said a general election year is never helpful.

"Things always change in an election year, the VAT (sales tax) coming back (up to 17.5 percent in January), unemployment's still a factor, the daily discussion about public finances.

"You take those four headings, business is going to be tough certainly for the next year, I don't see any easing in the next 12 months," he said.

British Prime Minister Gordon Brown is expected to call a general election next spring.

BLANK SHOPPING LIST

Monaco-based Green, who has twice tried and failed to buy British clothing, food and homewares retailer Marks & Spencer -- the latest attempt being in 2004 -- said there was nothing on his radar worth buying.

"I've got to here by being sensible, buying things I thought I could improve and not buying things that I thought were too expensive," said the entrepreneur, who bought department store chain Bhs for 200 million pounds in 2000 and Arcadia for 850 million pounds in 2002.

"I've never said I want to do another big deal. Everybody always wants to tell me I've got to do another one."

"There's nothing I have seen or I like that I think we could add sufficient value to, to make it work," he said.

Green denied that his failure earlier this year to buy about 1 billion pounds of debt in Baugur, the failed Icelandic investment company that previously owned much of the UK high street, was a missed opportunity.

"Do we want another 900 small shops? No, it's not attractive, all those rents," he said.

Green declined to comment on any plans he might have to form a global entertainment company with X Factor music mogul Simon Cowell. According to media reports, the company was to create and own television content on both sides of the Atlantic.

NO DIVIDEND

Arcadia, which completed the integration of Bhs into the group in July, reported a pretax profit of 213.6 million pounds for the year to Aug. 29, an increase of 13 percent.

But for the fourth year running Green did not pay himself a dividend. In 2005 Arcadia paid out a record 1.3 billion pound dividend after Green geared-up the business.

"There is the capability to pay one, there's no restriction. But I think we'll concentrate on what we're doing, we're trying to keep investing in the business at the moment," he said.

The 57-year-old Green also dismissed the suggestion that Thursday's appointment of Ian Grabiner as CEO of the enlarged Arcadia group meant he was slowing down.

"I'm working just as hard," he said.

(editing by John Stonestreet)

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