Profits at Arcadia, the retail conglomerate which includes Topshop and Miss Selfridge, are down by around a third this year, according to the group's owner Sir Philip Green.
Speaking to senior members of staff, the billionaire said difficult trading conditions were having an effect on the company.
He said: "The market remains tough and will do so for some time. It is as competitive as it has ever been."
According to a report by The Telegraph, poor weather last Christmas left the group with more stock than expected during the January sales. The disruption is believed to have cost Arcadia around £40m.
However, although conditions on the high street remain difficult, Arcadia is expected to announce considerable growth in its online sales.
Tough trading conditions have failed to shake Sir Philip's confidence in the group though, and he has continued to invest heavily in schemes such as the roll-out of Topshop in America.
