Sir Philip Green has announced that up to 260 stores in his Arcadia retail empire will close in the next few years after a dramatic fall in profits.

The billionaire entrepreneur, whose group owns chains including Topshop, BhS and Dorothy Perkins, has revealed that the company saw a 38 per cent fall in annual profits.

According to the BBC, sales at Arcadia stores in Britain and around the world have fallen by 4.4 per cent since the financial year began.

Sir Philip, who last year was appointed as an adviser for the government spending review, said the stores that would close would most likely do so when the leases expired anyway.

He blamed unseasonably warm weather over September and October for disappointing autumn and winter sales, as well as the tough economic climate.

"There may be other opportunities that turn up that we might want to open," he said.

The 59-year-old, who built up his empire from scratch after leaving school at 15, is believed to control around 12 per cent of the UK's retail market.