Sir Philip Green’s Topshop and Topman chains slumped to a £505m loss last year as sales fell and the retail tycoon wrote down the value of two of his flagship brands.

Sales at the fashion brands, which have about 350 stores worldwide, fell 9% to £846.8m in the year to 1 September as they struggled to compete with rivals such as Asos, H&M and Primark. Sales fell by 9.8% at the 200 UK stores.

About half of the loss was the result of a £245m non-cash writedown of the value of the group’s goodwill, which represents the value of intangible assets such as the power of a brand and good employee and customer relations. The businesses were also hit by write-offs of £161m of inter-company debts and the cost of unwinding the Ivy Park athleisure joint venture with Beyoncé. Topshop/Topman had posted a loss of £3.8m the year before.

Topshop is the main business in Green’s Arcadia retail empire, which last week revealed dire figures. The revelation of poor performance at Arcadia’s biggest brand comes after Green’s holding company admitted there was “material uncertainty” about its ability to continue trading without new funds, after slumping to a £177.3m loss last year – which included Topshop’s poor 2018 performance.

Profile The history of Arcadia Group Show The history of Arcadia Group When Sir Philip Green bought Arcadia, the retail group behind brands such as Topshop and Wallis, for £850m in 2002 he was already known as the king of the UK high street. Green made his fortune by breaking up Sears, the group which once owned the Freemans catalogue and Miss Selfridge, before buying BHS in 2000. He became a household name after his family collected a £1.2bn dividend from Arcadia in 2005, the biggest corporate payout in UK history. But in 2006 Topshop supremo Jane Shepherdson, the woman who put the brand on the fashion A-list, left amid rumours she was unhappy with Green’s management style. Her exit came just as Topshop teamed up with Kate Moss. The Croydon-born model helped front Topshop’s expansion into the US in 2009 where Green pledged to build a billion-dollar business. Three years later US private equity firm Leonard Green bought a 25% stake in Topshop for a reported £350m. Topshop and Arcadia’s other brands were slow to adapt to online shopping, however, and faced increasing competition from cheaper rivals, including Asos, H&M and Primark. AS sales fell, the group’s pension deficit rose. The collapse of BHS in 2016, shortly after Green had sold it to a serial bankrupt for £1, also dented his reputation. Arcadia recently bought back Leonard Green’s stake in Topshop for virtually nothing. The group warned it could collapse if landlords did not back a rescue plan involving closing 50 stores and rent cuts. The plan was approved after landlords were promised a 20% stake in any sale of the business. The Green family also pledged to pump £100m into the group’s ailing pension scheme. Sarah Butler

Photograph: David M Benett/Getty Images Europe

Taveta Investments, the owner of Arcadia Group, which is the parent of high street brands including Miss Selfridge, Wallis and Evans, said difficulties refinancing a £310m loan on Topshop’s Oxford Street store, due to expire in December, could mean it would have to raise new funds.

Green’s retail empire, which is formally owned by his Monaco-based wife, Tina, staved off collapse in June after winning backing from creditors for a rescue plan that involved the closure of about 50 stores, 1,000 redundancies and rent cuts of up to 50%.

The financial problems have raised new fears about the future of Arcadia’s pension fund, which Tina Green agreed to pump £100m into over three years in order to secure the backing of pension regulators for the group’s three-year rescue plan.

In a letter to the pensions regulator, Frank Field MP, the head of parliament’s work and pensions committee, said it seemed “increasingly unlikely that Arcadia’s three-year rescue plan will succeed”. He asks for reassurance from the regulator whether it is still confident in the recovery plan it had agreed for Arcadia’s scheme.

Accounts filed at Companies House on Thursday show the scale of the problems for Topshop and Topman. Sales fell by nearly 16% in the US, where Topshop’s stores are now closed after being put into administration. Even before those closures, the accounts reveal that the chains employed about 900 fewer staff.

But Topshop is fighting back by expanding online, with plans to launch on Next’s website in coming months after going live with Asos earlier this year. The label is already available online in the US via the department store Nordstrum and elsewhere with Zalando as well as via its own website.