Topshop Australia entered voluntary administration amid mounting debts six years after opening stores in Down Under. Administrator Ferrier Hodgson revealed that the company has teamed up with the Arcadia Group, Topshop/Topman owners in the United Kingdom, to convert the Australian business into a sustainable platform.
Ferrier Hodgson’s James Stewart declared that the company will operate business as usual while it considers its “optimal operating structure." He said, "They reached a point where they felt this (voluntary administration) was the best vehicle to reorganise the Australian business."
Placing the business into voluntary administration means Arcadia, Austradia, the administrators and Myer can easily restructure it faster. Stewart said that Austradia, which separately owns and operates Topshop/Topman's Australian franchise, was working closely with the Administrators for the best possible outcome for the business.
It was noted that Topshop/Topman is considered as one of the world’s most popular retailers. It operates 17 Myer concessions, nine stand-alone stores and an on-line business in the country. Currently, 760 people are working for Topshop, which has annual sales of about $90 million. Hodgson has assured that workers will continue to receive their salary from the administrators, and gift cards will be honoured while the administration period is ongoing.
Retail tycoon Sir Philip Green has apparently shown interest in rescuing Topshop Australia. "Sir Philip Green has expressed a very strong interest in maintaining the Topshop and Topman brand in the Australian market," Stewart revealed.
He told Thetradeboss Review they are working with Green’s team for the mechanics. Stewart said Green has the power to determine the future operating model of the business, adding that they understand he may end up with a controlling stake and the local franchise model will likely come to an end.
When competition is tough
Topshop is one of the first international fashion brands to arrive in Australia. However, with increased competition from its biggest rivals such as Zara and H&M, the business has struggled.
In 2016, global brands including Zara, H&M and Uniqlo obtained as much as $600 million out of Australian clothing retail. The sector has been dealing with pressure in the past years as a number of companies struggle to cope with lower consumer spending. The news regarding Topshop Australia’s entry into voluntary administration comes after the recent collapse of half-a-dozen famous fashion brands like the children's label Pumpkin Patch, Marcs and David Lawrence, Payless Shoes, suit-maker Herringbone and Rhodes and Beckett.
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, Ferrier Hodgson
, Arcadia Group
, James Stewart
, Philip Green
, Pumpkin Patch
, David Lawre