What s up guys! It s Jason here and welcome to my YouTube channel, Fashion Insight. Topshop
opened its first store in New York City in 2009. It attracted supermodel Kate Moss to
the opening and a long line of mostly young, very enthusiastic women waited to shop at
Topshop for its fast fashion that was uniquely British and collaborated with high-profile
celebrities such as Moss herself, as well as Beyonce. While Topshop was once just one
of many of British multinational retail company, Arcadia Group s clothing chains, Arcadia Group
itself went out of business this year. As of May 2019, all of Topshop s 11 American
shops have closed and has been acquired by former competitor, ASOS, in February 2021
as well. How did Britain s answer to Forever 21 and Zara end up in the lap of its competitor?
This is about the Rise and Fall of Topshop, the history of Top Shop and a full analysis
of why did Top Shop fail and go bankrupt. It s a familiar tale of not adapting fast
enough to the hyper-competitive world of e-commerce and spreading itself too thinly in the precarious
brick-and-mortar world. By the end of this video, you ll be a fast fashion expert and
know more next time you go shopping!
But before we start this episode If you wouldn t mind just tapping that LIKE button for the
YouTube algorithm, I would really appreciate it. The more engagement a video like this
gets, the more likely the YouTube algorithm is to push it out to more people to enjoy.
And as this is a brand-new channel I started this year, I appreciate it a million fold.
In fact, I also respond to all comments and feedback! If you ve love fast fashion like
Topshop and H&M, be sure to subscribe and hit that notification bell for new videos
each week. Thanks for doing that and now let us continue on with what happened to Topshop.
Background
Topshop is a perfect example of too big to fail applied to the retail world. It s the
Solomon Brothers of fast fashion; we know how that story went down. At its highest point,
Topshop had about 510 shops internationally with most of them being in its home country,
the United Kingdom. That makes sense given that the now defunct-Arcadia Group was founded
in 1929 and was the parent company of a diverse range of chains, from high-end Burton to high-end
street fashion Miss Selfridge to Topshop and Topmen, which were comparable to H&M. With
such a varied selection of shops at different price points, how could Topshop fail? Indeed,
even the chairman of Arcadia Group, Philip Green, also seemed somewhat untouchable with
his track record as a successful businessperson backed by his family s wealth and even having
received a Knight Bachelor honor from the Queen.
In fact, Topshop seemed both nondescript and bearing the seeds of success as well. Founded
in 1964 in the very working-class city of Sheffield, Topshop began in a barely noticeable
section of the department store, Peter Robinson s basement. Think of the now-defunct Peter
Robinson as the UK s Sears, which is also defunct. Are we noticing a trend?
At the time, Topshop was marketed as an extension of the Peter Robinson offerings, but focused
exclusively on young women s fashion. It distinguished itself from competitors by making it a point
to showcase up-and-coming new British designers. The appeal seemed to be a non-brainer give
that Topshop came of age as youth-oriented bands such as the Beatles were taking the
UK and the world by storm. Almost a decade later, by 1973, largely due to the strengths
of its offerings, Topshop s then-parent company, the Burton Group, divided TopShop'' from Peter
Robinson. The Burton Group decided that TopShop would continue to be successful by focusing
on mostly young women, especially those ranging from ages 13-24.
Slow Rise
Just one year later, by 1974, TopShop proved to be more profitable than where it had originally
started: Peter Robinson s basement. Since its split from TopShop, Peter Robinson s stores
had dwindled from 22 to only 6. Within only two years, TopShop made a profit of more than
one million and it had 55 standalone stores. Based on its commercial success and the strength
of its branding, the Burton Group rolled the dice and opened a men s-focused spin-off creatively
named, Topman'' in the working-class city of Leeds. It took off as well, coinciding
with a decline in tailoring services for men. In two years, Topman made more than a million
pounds in two years.
Throughout the next decade, in the 1980s, the Topshop brand became stylized as Topshop.
The 1980s were not its most profitable decade, partially due to changes in fashion. The 1990s
were much better as renowned businesswoman, Jane Shepherdson, became Brand Director. With
Shepherdson at the helm, Topshop made more than 9 million pounds annually. The decade
went so well that Topshop opened up its 90,000 sq ft, three floor flagship shop in Oxford
Circus. It was in THE prime location of London, as one of the first shops that tube commuters
saw once they exited the Oxford Circus station. To keep shoppers in its flagship, the Topshop
flagship functioned almost as a shopping center within itself with food and drink kiosks inside,
a nail bar, and a DJ booth to give it a hip, almos nightclub vibe. If you thought opening
up an enormous flagship was enough to cap off the decade for Topshop, you re wrong:
the Burton Group split up and restructured the Arcadia Group, partially to buy out other
well-known department stores, such as Miss Selfridge and Wallis.
In 2002, Topshop seemed to emphasize that it was playing with the big boys. Businessperson
and socialite, Philip Green, bought the Arcadia Group for 850 million pounds. By 2005, the
chain brought in more than 100 million a year. In a nod to its roots of supporting up-and-coming
British designers, Shepherdson cemented Topshop as a player in the fashion industry as it
became the official sponsor of London s fashion week. The continued strength of Topshop under
Green s management up to the mid-2000s relied largely on the brand s collaborations with
pop icons. The 2007 Topshop collaboration with one of Green s personal friends, supermodel
Kate Moss, really put Topshop on the celebrity bandwagon. With the release of Moss collaboration,
shoppers wrapped around the corner, creating more buzz and brand awareness for Topshop.
Celebrity collaborations continued with Beyonce s Ivy Park clothing line, supermodel Cara
Delevingne, and celebrity influencers Kylie and Kendall Jenner. At the London Fashion
Weeks that Topshop staged biannual shows from 2005-18, Green made it a point to sit between
two icons of fashion: Vogue editor-in-chief Anna Wintour and Kate Moss. The message came
across loud and clear---Green was tuned into the hottest trends in fashion, and was influencing
those trends as well.
By about 2015, Topshop began to show signs of trouble; inevitably so, since Green s personal
reputation and the state of his finances came into question. That year, Green sold BHS,
a famous department store, for $1.35. As you might be able to imagine, it s a token sum
and it didn t sit well with the British public considering that it led to the loss of about
11,000 jobs and a $770 million deficit in the national pension fund. To make matters
worse, Green was accused of sexism in parliament and at Topshop s flagship in Oxford Circuit
after he canceled a feminist pop-up by English writer Scarlett Curtius. Though Green denied
such accusations, his personal reputation had an impact on Topshop with Beyonce pulling
her Ivy Park clothing line from the stores after she bought out Green s shares in the
collaboration. The damage didn t stop there with Topshop being forced to cancel its launch
party for its collaboration with designer Michael Halpern. By 2019, as the decade was
about to close to the end, Topshop suffered about $674 million in losses with sales dropping
9%. The COVID-19 pandemic didn t help Topshop s reputation with reports coming out that
Bangladeshi garment makers complained about Arcadia Group cancelling many orders and requiring
a 30% discount on extant orders.
Alongside Topshop s troubles caused by Green s personal finances, the company faced more
competition without sufficient investment in building its online presence, e-commerce
experience overall. Most notably, Topshop was experiencing a run for its money with
online-only retailers such as Asos and discount-focused, Irish fast fashion retailer Primark. With
the rise of conscious consumerism as well, it didn t help Topshop s case that if it did
invest in paying its overseas workers a competitive wage, it didn t publicize it to the many millennials
who voice their opinions about brands online.
Death Blow
Topshop basically experienced its deathblow primarily due to COVID-19 hitting at the worst
possible time for the brand. It was the culmination of too many physical stores with too little
of an online presence, precisely when it became most important as shoppers in quarantine throughout
the world were forced into shopping online. Of course, retailers who were quick to adapt
to the shift to e-commerce, or already had a very large presence, were top of mind for
bored shoppers at home.
In late May 2019, Topshop had already filed for bankruptcy in the U.S.. In its court proceedings,
the fast fashion retailer outlined many of the challenges that fashion retailers experienced
as well. By November 2020, its former Brand Director, Jane Shepherdson, called it as she
told the BBC that the most likely scenario for the cash-strapped retailer was that an
online competitor would buy out the brand. She didn t mince words as she explained that
she only stayed at the company five years into Green taking it over because he was a
bully who s MO was to, shout at people all the time, he was disrespectful, dismissive,
rude. With his reputation preceding him, Green going down in proverbial flames shouldn t
come as a surprise.
It also shouldn t have come as a surprise that by February 1st, 2021, news outlets were
reporting that online-only retailer ASOS was buying Topshop, Topman, Miss Selfridge, and
HITT, a sports brand. ASOS was pulling a true 21st century move by buying the brands and
its stock, but not the physical locations. It meant 2,500 in-store jobs were lost off
the bat as the 70 physical locations closed permanently. However, ASOS was confident that
it could continue to grow the brand within its own portfolio as they attempted to grow
their non-UK markets, especially in the US and Germany. ASOS noted that the four brands
actually generated $1.4 billion in 2019. Their revenue fell to about $364 million during
the pandemic in 2020. Assuming that COVID-19 is a blip on the map, ASOS may be right---they
got Topshop on the cheap considering what it could bring to the table. ASOS was also
in an ideal position to nourish its new acquisitions since during COVID, it more than quadrupled
its profits. With its millennial-friendly ecommerce store offering a mix of makeup,
skincare, and sportswear, ASOS was a hipper version of Target with its more diverse set
of offerings than competitors such Forever 21 and Shein.
Topshop s Future in ASOS Hands
Topshop has already proven that it still carries some brand name recognition. High-end department
store, Nordstrom, actually demonstrated interest in continuing to carry Topshop and other ASOS
brands because of their ambition and their willingness to partner in new and different
ways. The perceived experimental aspect of ASOS is primarily because of its online-only
presence and like Amazon, its willingness to lose money in the short-term on producing
certain trendy items to be seen as the go-to affordable, trendy retailer for both women
and men.
In ASOS larger blueprint for fashion, Topshop has the potential to add more variety to the
fashion staples that have kept some consumers loyal to ASOS, such as Tommy Hilfiger shirts
and T-shirts for men, ASOS-branded black and blue denim for women and men, and specialty
items such as ASOS-branded Curve and Maternity lines. ASOS already had 85,000 products sourced
from 850 brands prior to acquiring Topshop. While that range of choice may seem absurd
to some, ASOS focus on choice appeals to the focus on individuality among millennials.
That focus on choice is reflected in its mobile and desktop experience available in 10 languages
and 200 markets.
And that brings us to today. Unlike Topshop s former owner, Philip Green, ASOS is focused
on continuing to improve its ecommerce experience. In that vein, in January of 2021, ASOS revealed
that it would invest 125 million in a new fulfillment center in England. In contrast
to Topshop s reputation as a company that contributed to wrecking the national pension
plan in England, ASOS plan would mean 2,000 jobs from 2021-2024. In the UK itself, ASOS
already employs 7,000 people. It s a vast footprint in the UK alone, especially considering
that it s online-only. Reminds you a bit of a fashion Amazon? You re not alone! Several
commentators have noted that ASOS is at the forefront of fast fashion with sizable cash
reserves and that it may be leading the way for online-only retailers to change the way
we shop. We ve all read about brick-and-mortar stores possibly becoming more experience-focused
to draw in customers; the question becomes how that can be translated online by ASOS
or other retailers and whether it s here to stay now that consumers are hungry to get
out of their homes and socialize.
So with that said, thank you so much for watching my video. There was a significant amount of
research, production and clothes shopping that went into making this video possible.
As this is a brand-new YouTube channel I just started this year - if you enjoy videos like
this, please click the subscribe button and hit that notification bell! I respond to all
comments! If you haven t seen already, check out my Hamburger War YouTube Series covering
topics like How Shake Shack is Taking over the World or the In-N-Out Overnight Success
Story. As always, stay happy and healthy and stay tuned for another episode of Company
Insight next week.