Topshop is the latest casualty of the crumbling Arcadia empire. It was the company that tipped the scales in its favor.
Topshop’s women’s clothing chain began in Sheffield and London in 1964 in the basements of the Peter Robinson department store. It was a goal to sell clothing designed by young British designers. Topshop’s buyer, Diane Wadey, was crucial to the brand’s early success. She was well-known in the industry for her keen eye for new talent.
Burton Group, the parent company of Topshop, opened a standalone Topshop store in 1974. In just two years, Topshop’s main target market was 13-24-year-olds. It opened 55 standalone shops and made a PS1m profit. Burton’s male counterpart, Topman, was launched in 1978.
In the 1980s and 1990s, the UK mass market was fragmented as value retailers like Matalan and New Look put pressure on fashion retailers to reduce prices. In order to maintain its competitive edge, Topshop gave the reins of the company to Jane Shepherdson, a woman who was hailed by many as “the most influential person on British high streets” in the mid-1990s. Shepherdson is credited for democratizing women’s fashion and changing how they shop and wear it. She transformed the brand into a style haven with well-designed and style-savvy clothes.
The retail landscape had changed by the early 2000s. With the advent of the Internet, designer catwalk collections that were previously a closely guarded secret became easily accessible at the click of a mouse. Clever high-street design and buying teams were then able to take these catwalk images and quickly translate them for production, reducing the six-month waiting period for “versions” of desired designs on the high street. Shepherdson’s team took full advantage of this opportunity, bringing the latest fashion to the public at a competitive price in just eight weeks.
Shepherdson abruptly left Topshop after 20 years of success and a turnover exceeding PS100m. Press reported that Shepherdson and Green had a falling out over the decision to let Kate Moss design for Topshop. Industry insiders, including Shepherdson, deny that this is the case. The road ahead of Topshop was tough from this point on.
What went wrong?
Ironically, Topshop’s unique selling proposition as “the closest high street shoppers could get to catwalk style” was the cause of its demise. As the retailer offered more and more fashion options to their customers, they became more demanding. As the competition intensified, international high-street retailers such as Boohoo, Asos, and Primark, who combine low prices with digital marketing, were gaining ground.
Green did not invest in digital retail channels as more people began to shop online. This left them incapable of competing with their competitors. Topshop’s 14-24-year-old demographic is driving online sales, which are up year-on-year.
Philip Green is the owner of Arcadia.
Footfall on high streets in localities has dropped dramatically in the past ten years and during the pandemic. In April, the drop was a staggering 80 percent. Topshop’s insistence on high-street shops and its fixation with physical retail was another setback. Intidex’s competitor Arcadia, for instance, has 107 stores across the UK, including Zara, Primark, and Pull and Bear, among other brands. Topshop, on the other hand, has over 300 physical locations in the UK.
Topshop, which had been quick to react to the catwalk’s styles under Shepherdson, has lost that ability since her departure. Fashion companies must respond quickly to new trends. By bringing suppliers closer to the company, companies are able to capitalize on “hot” trends rapidly. The shorter the lead time, the more flexible a retailer can be in their stock rotation. Green’s inability to build strategic supplier relationships and his preference for purchasing from Asia meant it was difficult to bring a product to the shop floor.
In 2018, sales were also affected by the boycott of Topshop by shoppers after Green had been accused of sexual harassment and racial abuse against staff. The activists also pressured Beyonce, who launched her popular activewear line IvyPark in Topshop in 2016, to cut ties.
Arcadia’s collapse marks the UK’s biggest corporate casualty so far. Topshop is not likely to disappear. Topshop’s strong heritage and brand recognition in the UK will likely mean that it will continue to exist even if only online.