Sir Philip Green told Britain to cheer up yesterday, despite his group’s profits having fallen by 40 per cent last year.

The Bhs owner, who declined for a fourth successive year to take a dividend from the retail group that he owns with his family, said that the country was at risk of talking itself into a recession.

“We need to get people to write that the world’s not closing down,” he said. “Yes, there are financial issues, way beyond the day-to-day, some of which I don’t think anybody understands. Fundamentally, there are people in work. We have not seen corporate Britain closing or a total consumer turn-off. We haven’t crashed into oblivion.

“We need some confidence in the marketplace. We can’t have everybody looking down.”

The retail entrepreneur’s attempt to reassure consumers came after Bhs’s like-for-like sales in the past six weeks, which have seen global financial turmoil, had dropped by 4 per cent and a day after the FTSE 100 recorded its biggest one-day fall.

Sir Philip said that the weather had dealt Bhs a blow. “We’ve had no help seasonally for over a year,” he said. “Winter’s been summer and summer’s been winter.

“This last weekend, as bizarre as it is, was probably our best weekend for six months. Maybe this weekend was better because it’s the first time we’ve actually had some autumn weather in autumn.”

Operating profits for the year to March 29 were down 39.6 per cent to £30.2 million, against £50 million last year and about a quarter of the record £112 million made in 2004. However, Sir Philip, who also owns the Arcadia group, which includes Topshop and Burton, said that the Bhs figures represented a “solid performance in an exceptionally challenging market”. Like-for-like sales for the year fell by 2.9 per cent.

Sir Philip has invested £50 million in capital spending over the past financial year, in contrast to his friend and adversary Sir Stuart Rose, who cut capital expenditure at Marks & Spencer last week, in an apparent U-turn.

Bhs has refurbished 33 sites, including its flagship store in Oxford Street, and it reported a 9 per cent rise in sales at the refurbished stores. Sir Philip also pointed to stronger performances in sales of children’s clothes, up 5 per cent, and home products, which outperformed the market with growth of 6 per cent.

However, Sir Philip conceded that there was “room for improvement” in womenswear. “We have four or five brands in childrenswear, two or three in men’s. We’ve been too slow to create brands in ladieswear,” he said.

Sir Philip said that Bhs would not use the low confidence in the stock market to make bargain acquisitions. “I’m not going to go through with some sloppy deal,” he said.

Bhs’s figures are the latest in a run of retailers’ results that make dismal reading. M&S, seen as a bellwether for middle-class spending, said last week that like-for-like sales had fallen by 6.1 per cent in the three months to September 27, forcing it to cut capital expenditure by £200 million to £700 million.

John Lewis, the department store also seen as a measure of middle-class spending, has reported a torrid two weeks since the failure of Lehman Brothers sent shudders through the economy. Sales in the week to September 27 fell to £48.7 million, down by 8.3 per cent year-on-year, after a 5.6 per cent decline the previous week.

Retailers say that their plight has been made more worse by landlords’ insistence on quarterly rent, the sum of which is determined by the rent paid by the last tenant to arrive.

Sir Philip is meeting a group of leading landlords today to discuss the issue. He and Lord Harris of Peckham, the chairman and chief executive of Carpetright, have led opposition to the practice, causing Francis Salway, president of the British Property Federation, to reply that the “retail cartel” risked falling foul of competition laws.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive