Topshop NZ as ‘flawed’ as in Australia
Topshop New Zealand appears to be using the same failed business model as Topshop’s Australian business, a retail expert says.
In Australia Topshop has closed four of its fashion stores, with a fifth to follow, after the franchise was placed in voluntary administration three months ago owing A$35 million (NZ$36.6m).
Topshop NZ would not comment on the Australian closures, instead reissuing a statement from May.
There are two Topshop stores in New Zealand: one in each of Wellington and Auckland.
A Christchurch store and second Auckland store are also on the horizon.
First Retail Group managing director Chris Wilkinson said: ‘‘Almost certainly they [Topshop New Zealand] will be using the same model.’’
While other fast fashion retailers, such as Cotton On, relied on a vertical retail model, Topshop was different, he said.
‘‘Topshop Australia and New Zealand rely on buying product from Topshop UK, which adds a layer of cost and complexity other [chains] don’t have,’’ he said.
‘‘That can be the difference between profit and loss, given the highly competitive nature of fashion retailing.’’
Topshop Australia founder Hilton Seskin told news.com.au Topshop’s retail model in Australia was ‘‘flawed from the start’’.
He said merchandise being sent to Australia was left over from sales in the United Kingdom.
‘‘Products that were made in Asia were shipped to the UK; put through a recycling plant, as you call it – a warehouse facility in the UK; converted from US dollars to GBP [British pounds]; [before] flying it out to Australia. So, the model was just broken,’’ Seskin said.
Wilkinson said Topshop New Zealand’s lack of an online store meant the brand did not have an online shopping option.
This was crucial, he said, with about 70 per cent of shoppers preferring to go online to look at products before buying.
‘‘There will be no doubt Topshop New Zealand will be aware and prioritising this.’’
Australia’s online store launched in April and New Zealand was yet to open one.
Since launching in Australia in 2011, Topshop opened nine standalone stores and 17 concession outlets in Myer department stores, and employed 760 people.
On Saturday, administrators announced the closure of five standalone stores in Australia. Two stores in New South Wales, one in Perth and one in Melbourne had already closed.
Australia’s first Topshop on Melbourne’s Chapel Street is set to close within weeks.
The brand was owned by British billionaire and head of Arcadia Group Sir Philip Green, whose British Home Stores department stores collapsed in 2016.
Green sold the 180-store chain for one pound in 2015.