Australian Topshop survives, but Arcadia to run just four stores

By

Sandra Halliday

Published
Aug 25, 2017

We've been waiting quite a while for news of what will happen to Topshop and Topman in Australia after the local firm holding its license went into administration. And now we know, the brands’ UK owner is still committed to the market.

After three months of putting a deal together, company representatives said on Friday that brand owner Arcadia will buy chunks of the business and take over the running of four stores from the Australian franchisee. The surviving stores are in key locations Sydney, Bondi Junction, Melbourne and Brisbane’s CBD.

The quartet of stores will employ 290 people, well down on the 760 staff members the chain had prior to the administration filing. It previously operated another five standalone stores and there were 17 concessions.

It’s clear that the remaining four have been chosen from the largest locations. Topshop and Topman are stores that lend themselves well to large spaces and comprehensive offers with both their trend-led and basics offers not really showing the brands at their best in smaller stores.

Department store chain Myer, which previously owned a fifth of the franchise operation and hosted those concessions in its stores, will have no financial stake in the reborn Topshop/Topman and has written off its investment.

Topshop first launched in the country in 2011 as part of an early wave of big-league Europe and US chains that analysts expected to have major success there. But while some have prospered (Inditex’s Zara being a good example), Topshop has struggled.

While analysts said that the market has been tough of late, with Australian retail spending falling, there were also suggestions from the franchisee that it had too little input into the product it was allowed to sell and that the product wasn’t always right for the local market.

Product decisions were being made at the firm’s UK HQ and now that the company is directly operating its Australian stores, those decisions will continue to be made in London. But if the decisions are wrong, it’s Arcadia that will bear the brunt of any mistakes.

"We are excited to operate directly in the Australian market and look forward to delivering unparalleled fashion to our customers," Arcadia said in its statement announcing the new set-up.