Leading British high street department store chain Bhs is on target for profits of up to £100 million following its purchase by entrepreneur Phillip Green last year.

When Green bought the chain from Terence Conran's Storehouse Group for £219m 18 months ago it was reporting losses of £16m. However, its rapid recovery could now lead to a stock market flotation, with Bhs being valued at up to £1 billion.

Green has radically cut costs and streamlined merchandise in a bid to beat the company's internal goal of £60m profits for the year ending March 2002. Merchandising has been taken back to its roots, with ranges focusing on the middle mass market of primarily 40-55 year old women.

The group is optimistic on sales prospects with one insider quoted as saying: "The middle market is a safe place to be. Others have gone upmarket and the discounters have suffered. We have the ability to sustain margins with cost control."

Green's Bhs makeover, including store improvements, contrasts with his break-up of the Sears business two years ago which he sold off for a profit of £180m. He is currently buying up to 25 per cent of the women's chain Whistles.