Topshop Parent Company Redevelop High Street Brand Locally

According to the world clothing shoes and hats net,

The parent company Arcadia Group Ltd. will buy part of the Australian franchise business which has entered the bankruptcy trusteeship to restart the high street.

Brand development in the local area.

In Sydney, Melbourne and Brisbane, the 4 independent stores of Topshop and Topman will continue to operate. The total number of employees in Australia will be reduced to 290, which will be significantly reduced than the 9 independent stores and 760 employees before the bankruptcy.

The bankruptcy administrator Ferrier Hodgson said that this can be ensured.

The best operating framework for local operations.

Topshop and Topman's Australian franchisee, Austradia Pty Ltd., were voluntarily hosted in late May after being overwhelmed by debt.

Myer Holdings Ltd. (ASX:MYR), the largest Australian high-end department store holding 1/5 stake in the company, has cancelled its shareholdings in July, and does not hold any equity at present. The 17 Topshop counters of its department store have also been closed.

5 other independent stores also closed in July.

In today's statement, Arcadia Group Ltd. is excited about the direct operation of the Australian market and expects to provide unprecedented fashion for local customers.

Austradia Pty Ltd. introduced Topshop and Topman into Australia in 2011.

Myer Holdings Ltd. purchased 25% stake in the company in 2015, and it has been diluted to 20% when it released its interim results in February this year.

Australian retail analyst Peter Ryan pointed out that Topshop was already doomed to failure in the local market. The high quality of the brand and the quality below the standard made it soon fade in front of the international competition, such as Zara and Hennes and Mauritz AB (HMb.ST) of Inditex SA ITX.MC.

Peter Ryan pointed out that the brilliance of Topshop only existed in the first two years of Australia. At that time, as the first fast fashion brand to enter the local market (including Zara and Gap, the H&M and Uniqlo UNIQLO followed), Topshop declined rapidly after that. The brand not only had a low price performance ratio, but also had a high operating cost, the fast fashion level was not as good as Zara, H&M and H&M, and the local e-commerce website came late in March this year, so it was not difficult to be redeemed.

Austradia Pty Ltd. sold more than $90 million in the last fiscal year, but recorded a $3 million loss.

In recent years, Australia's physical retail industry and the global economy are in the same recession. The slow growth of pay has led to a decline in consumer spending, and the challenge from electricity providers is also strengthening.

In the past 8 months, the brands and retailers of M Webster Holdings Pty Ltd., Herringbone, Rhodes & Beckett, Marcs and David have been closed down, causing thousands of retail employees to lose their jobs or face unemployment. The top brands of fashion brands, such as M and Webster Holdings, have been closed down.

In April of this year, Amazon.com Inc. (NASDAQ:AMZN) Amazon announced the expansion of the third party retailers' online platform Amazon Marketplace to Australia market, and the profit prospects of several traditional entity retailers such as Myer Holdings Ltd. were downgraded.

Gap Australia's franchisee OrotonGroup Ltd. ASX:ORL (also owns handbag leather brand Oroton) has revealed a three drop in revenue in the 11% quarter and a 2% decline in same store sales, of which the performance of the Gap Gap brand has deteriorated further, and is expected to have a negative impact on the basic EBITDA of the whole year to 3 million 500 thousand Australian dollars.

As for joint-venture Zara, the double digit sales growth was again achieved in the fiscal year ended January 31, 2017.

Last year, sales rose 15.5% to 256 million 400 thousand Australian dollars compared with the same period last year. During the period, the brand added a store in Sydney, Gold Coast and Brisbane. The same brand was also stationed in Australia in 2011 with a total of 18 stores and 1700 employees.

But even if Zara was not immune to the overall downturn in Australian retail sales, the sales growth of the brand slowed sharply last year, compared with 24% in the previous year, and its profits also dropped by 32.5% to 10 million 300 thousand Australian dollars.

The brand's local business is controlled by Inditex SA, India and India Textile Group, which is controlled by 90% of the shares. The remaining is owned by the Peter Lew, the son of Solomon Lew in Australia, through its International Brand Management.

Topshop and Topman last year were anxious both in the UK and in the international market.

In the fiscal year ended August 27, 2016, sales in Britain dropped by 1.3% to 896 million compared to the same period last year, and international revenue fell by 6% year-on-year.

Arcadia Group Ltd.'s holding company, Taveta Investments Ltd., has lost 17% to 2 billion 20 million pounds compared with last year, and its pre tax profit has dropped by 78.6%, from 172 million 200 thousand to 36 million 800 thousand pounds. The profit gap includes 81 million pounds of retail stores and 129 million pounds of one-time expenditure, of which 26 million is related to BHS's bankruptcy.

In early 2018, Topshop and Topman will develop the mainland's retail business through the 3 year old Chinese e-commerce platform.

However, according to the performance of New Look Look in China, the prospects of Topshop and Topman are not optimistic.

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