Sir Philip Green has insisted his Arcadia Group, the UK’s biggest fashion retailer, is well placed to ride out a retail downturn and could use its strong balance sheet to buy weaker competitors.

Arcadia, whose brands include Topshop, Burton and Dorothy Perkins, announced a decline in pre-tax profits on Tuesday from £199.2m to £188.9m in the year to August 30, on sales that fell 0.6 per cent to £1.8bn.