The past few years have not been kind to the retail industry, with even the most popular high street brands beginning to show the strain of operating under financial pressure. While supermarkets and other stores which stock daily necessities have managed to keep their heads above water for the large part, fashion stores and specialist brands have found the struggle for survival a lot tougher.
However, one fashion retail group has managed to coast through the financial difficulties relatively easily, thanks to the huge success of its flagship brand. The Topshop/ Topman brand has been one of the major success stories of the Arcadia Group, which also owns the Miss Selfridge and BHS chains.
Kate Moss launched her own range of Topshop fashions in 2007
In the year to August 25th, Arcadia reported a rise of 25 per cent in annual underlying profit partly due to the popularity of Topshop in the 18 – 24 age range with both males and females choosing to shop there for the latest fashion trends. The brand was given a boost in image by supermodel Kate Moss in 2007 when she launched her own range of fashions. This led to the single most successful shopping day for Topshop.com.
Yet chief executive of the Arcadia Group, entrepreneur Sir Philip Green, is not simply satisfied with the Topshop brand remaining a British success, as he is currently rumoured to be holding talks with the owners of American brand J Crew, with the aim of selling a quarter of his stake in the firm to allow for easier expansion into the States.
As Topshop is reportedly worth an estimated £1 billion or $1.61, when all assets are taken into account, Leonard Green & Partners LP would have to pay around $400 million in order to reap the rewards of an international Topshop expansion. Yet this money would not go into the pockets of Sir Philip, as he will supposedly use it as capital to facilitate the company’s expansion into the USA and also in China.
There are already three Topshop stores operating in the USA; one in Las Vegas, another in Chicago and the final one in fashion capital New York. A fourth store is expected to open in Los Angeles in spring 2013. However, should the deal go ahead, the number of stores will multiply dramatically and also allow for the brand to expand its online presence.
At present, Topshop operates in 39 countries, with 615 franchised branches worldwide.
A friend of the entrepreneur denied that Sir Philip was looking to sell a quarter of the business for personal financial gains, saying; “You would be wrong to suggest Sir Philip is going to use this deal to make cash out of the business.
“This is about investing in a big push for Topshop and Topman internationally.”
The Arcadia Group employs 45,000 people and Sir Philip’s family fortune is estimated to be around £3.3 billion.
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