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Topshop Has Entered Administration, But How Did It Come To This?

Photo credit: David M. Benett - Getty Images
Photo credit: David M. Benett - Getty Images

From ELLE

Over ten years ago, maybe as little as even five, it was inconceivable that Topshop would not be the jewel of the British high street. Arcadia boss Philip Green would sit himself next to the biggest front row guests at its London Fashion week show, be it Kendall Jenner or Cara Delevingne. Topshop’s collaborators included Beyoncé and Kate Moss; few of us can forget the smugness of securing the much sought-after Kate Moss for Topshop floral tea dress that consequently spurred numerous copies. The fashion press would regularly hail its seasonal trophy pieces alongside luxury items. Topshop represented the democratisation of fashion, which meant shoppers without huge budgets could finally have a slice of the catwalk pie.

Fast forward to 2020, and Topshop finds itself in a far sadder state. On 12 June 2019, Arcadia was saved from administration after a company voluntary arrangement (CVA) agreed to Green’s proposed rent cuts - up to 50 per cent less - plus 23 store closures and 520 job losses. Then the pandemic arrived, creating an even greater sales crisis, and yesterday, 30 November, Topshop entered administration, putting 13,000 jobs at risk.

Photo credit: Getty
Photo credit: Getty

The fall of Topshop is now unarguable, but how did it come to this? "The market place has changed forever - people want a different kind of service,” Green told the BBC after the CVA deal was agreed in 2019. “Should we have seen that three or four years ago? Maybe. But now we need to get on with the job.”

There are numerous factors which have contributed to the situation that Topshop finds itself in, not least the outbreak of coronavirus which forced closure of stores for prolonged periods this year. But, let's not forget, this is an issue that pre-dates Covid-19. The brand's inability to keep up with shoppers’ changing desires is key. As we grew older, Topshop didn’t. The golden age of the brand was influenced by Jane Shepherdson, who joined the company in 1998 as brand director and transformed it from a cheap brand aimed at teenage girls to a global powerhouse popular with both the public and fashion editors. Shepherdson’s skill was her eye for considered design – she knew that if she spent money on how a piece looked, profits would ensue. In 2006, she resigned and moved to Whistles, then an ailing brand aimed at women in their 40s, again turning it into a hugely successful, desirable label with London Fashion Week presentations. Its reputation and fashion kudos has arguably weakened since her departure in 2016.

For many years after Shepherdson left Topshop, her legacy was upheld – there was the JW Anderson collection which had everyone buying bat knit jumpers and twisted trench coats; London Fashion Week shows that attracted A-list models and celebrity guests; and a high-profile collaboration with Beyonce on her Ivy Park sportswear line. But then something shifted; women beyond the age of 30 felt there was nothing for them at Topshop anymore. Those shop windows that had once been sartorial kryptonite became a haze of crop tops and cheap-looking fabrics. A collaboration with buzzy designer Michael Halpern didn't take off as expected, and its launch party was cancelled. The language of Topshop changed, alienating swathes of adult women.

Women’s shopping habits changed – as sustainability rose to the fore, so did contemporary, mid-range brands such as Ganni, Rixo and Reformation. These labels spoke to women in a way that the trend-led, disposable styles of Topshop didn’t. Rather than buying clothes for a certain event, women started looking for pieces that had longevity and could be incorporated into existing wardrobes – items that don’t scream a specific season and had to be discarded the following year.

Photo credit: Getty
Photo credit: Getty

Women in their late twenties and thirties weren’t the only market that Topshop stopped catering to. It also managed to disconnect itself from younger shoppers, losing out to huge online juggernauts such as Boohoo and Missguided. Boohoo, known for its £20 party dresses (and also for allegations about the poor treatment of its factory workers) has seen huge success by creating limited ranges of each item, and then increasing production on the third that’s selling the best. This means cravings among teenage and early twenty-somethings are satisfied and that fast fashion is made even faster. Topshop isn't in the same position - it needs stock to fill its shop floors.

Boohoo currently now faces a 'slavery' investigation over the low pay of some employees (claims the company denies); questions still need to be answered as to whether it is an ethical or environmentally conscious business. However, it astutely became a body-inclusive brand with a ‘fashion for all’ approach, creating plus-size styles modelled by plus-size models. The firm was also quick to spot the impact that fashion influencers had on shopping habits, and started working with a diverse array of leading Instagrammers before many of their competitors. In 2019, Boohoo's overall revenue skyrocketed by 48 per cent to £856.9 million. The brand offers a cheaper, wider range than Topshop can offer, spearheaded by influencers of different shapes and sizes who its young shoppers actually identify with.

Of course, Boohoo’s success story is an anomaly on the high street today. In 2018, New Look, House of Fraser, Next and Marks & Spencer all succumbed to marketplace challenges. LK Bennett and Orla Kiely both entered administration, and the once untouchable ASOS also reported a slump in sales. The chaos caused by Covid-19 has caused further casualties in 2019, including Debenhams, TM Lewin, Victoria's Secret, Oasis and Warehouse. Topshop’s situation is by no means unique; the future of the high street remains unclear and no one knows how to regenerate retail space.

Pandemic aside, perhaps one of the final nails in the coffin for Topshop is the reputation of Philip Green, which suffered hugely following the BHS pension scandal in which thousands were left massively short-changed. He’s also attracted negative attention over his tax affairs; in 2005, his company paid a £1.2 billion dividend to the owner of Arcadia – his wife, Tina. Since she is a resident of Monaco, she paid no tax in the UK. It's worth noting that the company does, however, pay corporation tax. More recently, Green has been accused of bullying and sexual harassment – allegations he denies. Beyonce severed ties with the brand in the weeks following the accusations, buying him out of Ivy park, a gymwear line that she co-founded with Green. In a mindful #MeToo era, there are, for some, ethical issues about shopping at Topshop and lining the pocket of such a divisive, bullish character. If the changing direction of Topshop collections had left older shoppers feeling cold, the toxic legacy of Green himself is a final clincher. For many, to buy in Topshop today feels grubby and unnecessary when the alternatives are so strong.

For too long, the company’s success has meant that Green could rest on his laurels. It's hard not to conclude that he took his eye off the ball, sat on his yacht and stopped innovating at a time when the high street was being tested the most, meaning that when the pandemic arrived, Topshop was already on thin ice. If this is correct, his inaction has tragically destroyed the livelihoods of thousands of employees. There was a time that the retailer was universally adored by women around the world, and it’s time to give them what they want once again.

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