The Daily Telegraph - Saturday - The Telegraph Magazine
The emperors’ new clothes
How the high street kings crashed and burned.
Boohoo has no real interest in shops. Bricks and mortar are not part of its business model
Boob tubes, cowboy boots, the lemon one-shoulder dress from the first Topshop/kate Moss collection in 2007… these are not the first items you would look to for an unfolding Greek tragedy. But what is hubris writ large, if it is not Sir Philip Green impatiently batting away my question about what he thought of Asos with one of his habitual ‘tsks’? This would have been in 2009, when Topshop still ruled the high street, loved by everyone from 15-year-olds to fashion editors. The Oxford Circus flagship alone was valued at £400-500 million, and there were a further 70 or so branches nationwide. fashion websites like Asos, which launched in 2000, were still perceived as parvenus. Just in case I was in any doubt that I was wasting his time, he added an eye roll and words to the effect that Asos was a flash in the pan.
Twelve years later, that ‘flash in the pan’ has just bought Topshop, Topman and Miss Selfridge – all part of Green’s once-glittering Arcadia kingdom, for the knock-down price of £330 million. Asos will not be reopening any of Topshop’s branches. As its current CEO Nick Beighton recently said, ‘that genie is out of the bottle’. The money at Asos now goes on research into artificial intelligence and augmented reality. The stores that Green, 68, loved to prowl around, are shuttered, the stock locked away.
It’s not only within Arcadia that circumstances are anything but Arcadian. Debenhams went into administration last December, jeopardising 12,000 jobs, and has just been picked out of the bargain bin for £55 million by Boohoo.com, the upstart webonly, pile-it-high, sell-it-cheap merchants based in Manchester.
Back in 2007, while Green was inking his £3 million-plus royalties deal with Moss, Boohoo was just getting going in Manchester under the wily, energetic watch of entrepreneurs Mahmud Kamani and Carol Kane. Kamani and Kane had worked together at another company that supplied Asos, or as it was initially known, Asseenonscreen.com.
Asos had originally been set up to supply customers with replicas of anything used by celebrities on TV: one of the first items it sold was a pestle and mortar Jamie Oliver had used in one of his cookery shows. It was only several months in that its CEO and founder, Nick Robertson, realised the gold lay in fashion. Kamani and Kane already knew that, and Boohoo was their attempt to oust the middleman – Asos – and sell direct to cashstrapped under 30s who wanted a £5 outfit for the weekend.
Fast-forward 14 years and Boohoo has thrived and is currently valued at £5 billion. As well as Debenhams, it now owns Karen Millen, Oasis and Coast, plus the remaining flotsam of the Arcadia group (Dorothy Perkins, Wallis and Burton), which it recently picked up for the humiliatingly low price of £25 million. Don’t expect any public crowing from Kamani or Kane, however. They are practically mute when it comes to the press.
Like Asos, Boohoo has no real interest in shops. Bricks and mortar are not part of its business model. The 56-year-old Kamani, whose family’s taste for the high life is not dissimilar to Green’s – flash parties, trips on private jets – is a grafter, the son of a market trader. Kamani, two of whose sons co-founded the young fashion addicts’ go-to, Prettylittlethings.com, says his retail spree is by no means finished. ‘Work is good for your soul’ is one of his favourite mantras. Those survivors on the high street beware. But what will happen to the thousands of empty stores, and where does that leave that great British pastime – shopping? As a social and leisure destination, the high street is over.
Back in 2009, not long before I asked Green about Asos, I interviewed Nick Robertson. He was 41 at the time – affable, slightly portly (my words: he called himself ‘the fattest cox ever to helm at Henley’), an engaging combination of self-effacing modesty and raging optimism, which, as I noted at the time, must come in handy if you didn’t exactly cover yourself in glory at public school (two Ds and an F at A level). He went on to work in advertising and set up Asseenonscreen.com in 2000. Asos was digital, data driven – my teenage daughters and all their friends were obsessed with it – helping to up its 2009 turnover to £178 million. It now generates around £3 billion a year.
So how did Green, with his own teenage daughter, not see these two coming? To be fair, Chloe, now 29, was more of a Dolce & Gabbana girl. Green bought Arcadia in 2002 and quickly sold it on to his wife, Tina, and his tenure was marked by relentless cost-cutting and refusal to listen to anyone. He wasn’t the only one with myopia. In 2021, after almost a year of lockdowns, what is left of the high street hasn’t sharpened up its act either. Primark still doesn’t sell on its website. New
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Look and River Island are pale shadows of their strutty 2007 incarnations. Gap – which took the UK by storm in the late ’80s and ’90s, with its sleek affordable, utilitarian minimalism – is in so much trouble, both in the US and Europe, it’s considering closing hundreds of stores.
It’s as if they’ve all been administered the same poison of irrelevance. The pandemic has already put 240,000 fashion jobs at risk in Britain, according to forecasts from Oxford Economics. In 2019, the fashion industry contributed £35 billion to the UK’S coffers. In 2020, pundits anticipated it would be down to £26.2 billion. Even before 2020, many of our high-street names were struggling. As well as trouble at New Look and River Island, Principles, once a stop on the fashion-aware 30-something’s retail map, became a Debenhams-only brand; LK Bennett is in administration; Jaeger has worked its way down the high-street hierarchy, only to be rescued by M&S early this year.
But no fall from grace has been bigger than Topshop’s, partly because of its exalted position as a fashion lover’s rite of passage. By the time Topshop’s losses capped nearly half a billion pounds in 2019, clouds of schadenfreude had gathered over that prime slab of retail estate at Oxford Circus.
‘The problem with Topshop is that its owner has an increasingly bad reputation, and that doesn’t help brand loyalty,’ Peter Mace, a partner specialising in fashion at real estate agent Cushman & Wakefield, told The Telegraph last autumn, in an article referencing the BHS pensions scandal and accusations about Green’s alleged sexual harassment and racial abuse of staff (which he denied) in 2018. ‘When you look at Zara and H&M they have very dynamic businesses – Zara produces well-made new collections every few weeks and has a very good website – and Topshop now simply isn’t as good as its competitors. And this is a terrible year for customer loyalty to have waned.’
Time was when an owner’s or CEO’S ‘bad’ reputation barely impacted on sales. Despite being a business largely predicated on selling to women, the top of the rag trade was dominated by swaggering, and occasionally charming, males. There was Sir Ralph ‘Five times a night’ Halpern who successfully ran the Burton Group in the 1980s and rose to fame in the tabloids, thanks to his alleged sexual conquests. There was Terry Green, the forthright Debenhams CEO from 1992 to 1997, who rang me after I’d written about one of his colleagues, Belinda Earl, to explain, emphatically, that contrary to most journalists’ perceptions, it was he, not Earl, who had introduced the Designers at Debenhams concept. There was The CEO Who Cannot Be Named, who was so handsy that no journalist in her right mind went to interview him more than once. And the one who presided over the inexorable decline of his once mighty domain and yet only ever got promoted.
This is not to imply they were all useless. There were goodies, and there were baddies. But they all operated at a certain decibel, slagging each other off, expletives and insults whizzing around like bullets, which,
on the plus side, made great copy. But it could be unnerving. My first encounter with Green was when he called me directly – he never liked to use a PR when he could do the screaming himself – to give me the hairdryer treatment over something innocuous I’d written about BHS. A fashion editor on another paper once told me that when she got the Green treatment it felt like ‘being pushed up against a wall in a scene from Grange Hill’.
No wonder the rag trade was fuelled by machismo. The disconnect between the glossy images the top brass promoted and the cheap product they were selling was almost blinding. Keeping journalists at arm’s length from the real merchandise seemed to be one of the PRS’ main briefs. Instead we would be shown a few, tightly edited designs, often manufactured in superior fabrics to those that made it into stores. ‘The worse the tat, the ritzier the launch, the bigger the supermodels,’ as one former colleague recalls.
Eventually the gap between perception and reality antagonised us, and things calmed down, a bit. ‘All that crap of buying samples just for the press and maybe putting the odd one into store is over,’ announced Terry Green. By then he’d left Debenhams and was in charge of clothes at Tesco. The supermarkets were edging in on the high street in the race to the bottom. But even the mighty Tesco had a problem, as Green acknowledged. ‘One of the biggest issues I face is space. Seventy per cent of our stores only get 25 per cent of the range,’ he told me in 2008. Space however, was not an issue for Asos and Boohoo.
You’d think an interest in fashion and a love of product – or at least the ability to delegate to people who have those qualities – would be two basic requirements for a high- street CEO, but it has never been a given. Phil Wrigley, the affable chairman of New Look during the early Noughties, told me that prior to 2007, the chain didn’t even have its own designers.
Topshop also had its reputational ups and downs as a fashion Mecca. In the late ’80s it was referred to as Flop Shop. But by the time brand director Jane Shepherdson had worked her way through its ranks in the late ’90s, that all changed. She had a Jack Russell’s nose for the next big thing and a terrier-like ability to chase it down. Once Philip Green arrived, her departure was just a matter of time.
Green, to give him his dues, had pulled off quite the coup with his Moss deal. With just over a dozen collections between 2007 and 2014, the partnership was estimated to add 10 per cent to the brand’s turnover – as well as propelling it on to luxury website Net-a-porter.com. But even at the start of the PG/KM love-in, there was a sense of smoke and mirrors. I was at the launch of the debut collection in 2007 and remember squirming as Moss, standing behind the plate glass of the Oxford Circus flagship, tugged on the red curtains that were meant to open, revealing her goddess form to hundreds of fans queuing outside, but which remained stubbornly closed. Carry On Up The Circus.
Never mind. Moss was Green’s passport to the US. In 2009, Topshop opened in New York, in the midst of the mother of all recessions, while privately Green’s team begged him to invest in more pressing cases, such as its juddering website.
But he wasn’t interested in websites now that he had Anna Wintour on speed dial. Behind the scenes, senior staff came and went. ‘You’d come in one day and suddenly an office had disappeared and been turned into a meeting room,’ says a former employee. ‘But what’s really weird, for such a successful business character, is that he knew nothing about product. He didn’t have the faintest understanding of fashion. But his word was God. And all the while budgets were endlessly slashed. It was so sad, because for a long time it was the best place in fashion to work and filled with the most talented people.’
In 2018 Topshop ended its sponsorship of London Fashion Week in a retreat that summed up the entire great British High Street’s retirement from aspiration. For Topshop it meant no more Alexa Chung, Delevingne sisters or Kate in the front row. No more ambition to be a fashion leader.
Things didn’t look too pretty for his other Arcadia names, Dorothy Perkins and Wallis either. The glory days of big-budget campaigns with supermodels and super-photographers had long gone – one of the last hurrahs being Yasmin Le Bon’s collections for Wallis, which ended in 2010. Even the stylish, approachable Le Bon couldn’t lift what had, in the 1960s, been called the ‘Chanel of the high street’ out of the doldrums.
Green has been accused of bullying and – rightly – vilified for his betrayal (later rectified) of BHS employees’ pensions. But with one or two exceptions (notably M&S), the UK high street had never been a paradise of exemplary working conditions.
One of the biggest fashion winners of 2020 was Boohoo. Despite last summer’s allegation linking it to Leicester factories paying workers £3 an hour, an accusation that was later dismissed, it powered through the year. For the moment, Kamani’s hunch that price trumps aesthetics seems to have paid off. But Kamani and Kane would be wise not to get complacent – Shein (pronounced ‘She In’) is a mysterious Chinese web-only brand playing the ultra-cheap fast-fashion card too – and winning. It seems if prices are rock bottom, customers are prepared to put up with variable quality, sizing and unreliable deliveries.
The optimistic forecast for the high street is that it will be much smaller, with decent basic staples and cameo appearances from designers such as Jil Sander, who know how to harness the technological know-how of giants such as Uniqlo.
But that requires innovation and investment – and the pessimistic take is that the pile-it-high merchants aren’t incentivised to put their money in catering upwards.
If the covenant the high street had with its customers in the early Noughties to provide forward-thinking design and investment items really is fading, that will touch all of us, from consumers to the 800,000 or so whose work brings them into contact with the industry. ‘I’ve got friends worried to take jobs at some firms because of the culture there,’ says a PR currently on leave because of the pandemic. ‘In the end, though, they’ll put up with it because they love fashion.’
The question is, will the public stay in love with the British high street?
‘Green didn’t have the faintest understanding of fashion. But his word was God’