Topshop set for return to UK high streets as iconic brand is sold

Posted by Admin September 5, 2024 Fashion

TOPSHOP could be making a dramatic comeback to the British high street in a welcome boost for shoppers who mourned its loss.

ASOS announced this morning that it will sell a 75% stake in the brand to Bestseller, a Danish retail group that owns Jack & Jones.

The sale of a majority stake in Topshop comes amid huge struggles at ASOS, which has suffered from sinking profits and sliding sales since the pandemic

In November 2020, Sir Philip Green's Arcadia Group collapsed into administration and all high street stores closed — In November 2020, Sir Philip Green’s Arcadia Group collapsed into administration and all high street stores closed

Bestseller, which is also ASOS’s largest investor, has around 2,800 retail stores in more than 30 countries.

Asos bought Topshop out of administration for £265million in 2021.

As part of the £118million joint venture deal with the Scandinavian group, ASOS will be relaunching Topshop.com as a separate website.

However, in news that will thrill millennial shoppers, ASOS’s boss also suggested a return to bricks and mortar shops was on the cards.

José Antonio Ramos Calamonte, chief executive of ASOS, told reporters that the deal would make Topshop “more accessible”.

In response to The Sun’s question whether this meant it was returning to the high street Mr Ramos Calamonte said: “It is very early to say that there will be physical stores, but there is no question that they [Bestseller] have a big present presence on the high street.

“We think that they have a lot of potential.”

Industry rumours have suggested they have already started scoping out potential sites for Topshop’s revival, including London’s famous Carnaby Street.

Mr Ramos Calamonte said: “We will always explore what is best for ASOS, but we are not looking at any specific store right now.”

The sale of a majority stake in Topshop comes amid huge struggles at ASOS, which has suffered from sinking profits and sliding sales since the pandemic.

I used to work in Topshop and I always had to call out customers for the same thing – they were totally shameless

It revealed that recent sales at Topshop had fallen by a further 15% while its wider group sales were below City guidance.

When ASOS bought Topshop in 2021, online was seen as the future of retail, as sales were booming.

Lockdown had forced many shoppers to switch to online, which benefitted ASOS, while Sir Philip Green‘s Arcadia Group, which owned Topshop, Dorothy Perkins, and Miss Selfridge, was killed off because of its reliance on stores.

Since covid restrictions have eased, around 60% of fashion shopping has switched back to physical stores.

Susannah Streeter, analyst at Hargreaves Lansdowne, said: “This Scandi makeover could potentially herald a much bigger return of Topshop and Topman to bricks and mortar stores around the world.

“Heartland owns Bestseller, which operates a raft of other brands, some with standalone UK stores like Jack and Jones, while its Vero Moda collection is sold by other retailers, including Next.”

She added: “Although Topshop clothes made a limited reappearance on the high street in ASOS’ first physical store, it has mainly been an online-only brand since Arcadia’s collapse.

“Bestseller’s products are sold in 70 countries across Europe, Asia, North America, South America, Oceania and the Middle East while the wholesale business sells to more than 16,000 multi-brand and department stores globally.

“This deal could put Topshop back on the global fashion map – a dream Sir Philip Green tried to achieve but ultimately failed to realise.”

SUN BUSINESS VERDICT

Analysis by Ashley Armstrong, The Sun’s Business Editor.

Topshop was the ultimate fashion powerhouse twenty years ago – it managed to be as loved by celebrities as fashionable working women and teenage girls in provincial towns.

Sir Philip Green flexed his connections with star-studded fashion front rows and collaborations with Kate Moss and Beyoncé.

Meanwhile its giant Oxford Street store, known by many millennials simply as “big Topshop” was a Mecca for most women and a cultural landmark in the noughties.

It then all came cratering down when Sir Philip’s reputation had been tarnished by a “me too” scandal and the brand failed to keep with the times.

Since Topshop disappeared from the high street and was snapped up as an online-only brand by Asos nothing really has had the same impact.

Meanwhile, its Oxford Street flagship store remains empty and covered in blue plastic advertising awaiting its delayed reopening as an Ikea.

The gap it has left in the fashion landscape means it exciting news that Topshop could be making a comeback. But the question is have shoppers moved on and can it ever recapture its sparkle?

When Asos snapped up Topshop from Sir Philip’s bust Arcadia Group it seemed symbolic of a changing of the guard in the British retail industry.

However, Asos is no longer the retail darling it once was either. It has crashed in value over the last few years as sales have slumped and profits have been wiped out.

The online fashion giant boomed when lockdowns meant shoppers were forced to buy online, but it has suffered as shoppers have drifted back to the high street.

Topshop has been largely forgotten as just one of Asos’ thousands of brands on its platform.

It makes sense then that Topshop’s new majority owner, Denmark’s Bestseller, think it’s a good idea to remind shoppers that Topshop exists.

And what better way than a few big stores that shoppers can flock to again?

TOPSHOP’S DECLINE

The rise of e-commerce and the shift in consumer behavior towards online shopping caught the brand off guard.

While competitors like Zara and H&M quickly adapted to the digital landscape, Topshop struggled to keep pace.

Additionally, the brand faced criticism for its fast fashion model, which became increasingly scrutinised for its environmental impact and labour practices.

The rise of more ethical and sustainable fashion brands further eroded Topshop’s market share.

Financial troubles began to surface within the Arcadia Group, exacerbated by Sir Philip Green’s controversial business practices and personal scandals.

In 2019, Arcadia Group entered a company voluntary arrangement (CVA) to restructure its debts, leading to the closure of several Topshop stores.

A HISTORY OF TOPSHOP

TOPSHOP was founded in 1964 as a youth-oriented fashion brand under the umbrella of the Arcadia Group.

The brand started as a section within Peter Robinson, a department store in Sheffield.

But, it quickly gained popularity for its trendy and affordable fashion, appealing primarily to young women.

By the late 1970s, Topshop had established itself as a standalone brand, opening its flagship store on London’s Oxford Street in 1994, which became a fashion landmark.

Topshop’s golden years spanned the late 1990s and early 2000s, during which it became synonymous with fast fashion.

The brand was known for its ability to translate high fashion trends into affordable, ready-to-wear clothing quickly.

The launch of the Topshop Unique line in 2001 further solidified its status, offering runway-inspired collections that debuted at London Fashion Week.

Under the leadership of Sir Philip Green, who acquired the Arcadia Group (Burton Group until 1998) in 2002, Topshop expanded internationally, opening stores in major cities like New York and Los Angeles.

Collaborations with high-profile designers, including Kate Moss in 2007, brought further acclaim and visibility to the brand.

At its peak, Topshop had around 510 shops, including over 300 shops located in the UK.

Despite its success, Topshop faced several challenges that led to its decline.

THE FINAL BLOW

The COVID-19 pandemic delivered the final blow to Topshop.

Lockdowns and reduced foot traffic in retail stores accelerated the brand’s decline.

In November 2020, Arcadia Group collapsed into administration, putting 13,000 jobs at risk.

Despite efforts to find a buyer, the group’s assets were ultimately sold off.

In February 2021, online fashion retailer ASOS acquired Topshop, Topman, Miss Selfridge, and HIIT brands for £265million.

However, the acquisition did not include physical stores, marking the end of Topshop’s high street presence.

While Topshop’s physical stores disappeared, its influence on fashion has remained.

The brand’s legacy continues through its online presence under ASOS, which still offers a global audience of trendy, affordable fashion.