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Comment: What Arcadia is lacking on the high street

Emily Sutherland

As Arcadia seeks to close stores in the UK and the US, Drapers assess the strengths and weaknesses of the high street heavy weight’s fascias.

Arcadia, a mythical region of ancient Greece, was known as an untroubled, idyllic paradise. The same cannot be said of the retail empire that shares its name. Following months of rumours about restructuring, store closures and last-minute crunch meetings, Sir Philip Green’s high street chain has confirmed it will become the latest in a long line of retailers to launch a company voluntary arrangement (CVA).

The group has proposed seven CVAs across its companies, which, if approved, would result in 23 UK store closures and the closure of all eleven Topshop Topman stores in the US. 

Green’s Arcadia Group comprises Topshop/Topman, Miss Selfridge, Wallis, Dorothy Perkins, Burton, Evans and Outfit. It has grown from menswear chain Burton, which was founded in the early 1900s by Lithuanian immigrant Montague Burton. As the business grew, it launched Topshop in the mid-1960s and Topman the following decade. Wallis, Miss Selfridge and Outfit followed in the 1990s and what become the Arcadia Group was bought by Green’s Taveta Investments in 2002.

Once riding high, the group has lost its lustre. Sales slumped by 16.6% year on year in the three months to 18 November 2018 and, in February, credit insurance firm Euler Hermes wrote to suppliers warning it planned to cut cover for the group. In its most recent published full-year results, former young fashion giant Topshop reported a £10.9m loss in the year to August 2017, compared with profits of £59.4m in 2016.

Earlier this year, retail experts told Drapers that although flagship brand Topshop is salvageable, some of the other “tired and stale” brands must be jettisoned to secure the group’s future.

Walking into Topshop’s Oxford Street flagship, it is easy to see why this store remains the jewel in the group’s crown – so much so that Green is said to have offered the store as security to the Arcadia pension fund.

Loud, buzzy and permanently busy, the flagship has been home to some innovative examples of recent theatre over recent years, including a virtual reality waterslide and immersive recreation of scenes from Netflix’s cult hit Stranger Things. On the day of Drapers’ visit to the store earlier this month, bright posters urge shoppers to “snap and share” by taking pictures in store and posting them online. Giant neon pink plants provide some dramatic and suitably summery visual merchandising. Overall, the effect is impactful and impressive.

Experiential retail also has not been forgotten upstairs at Topman, where a sculptural Perspex chandelier dangles from the ceiling and customers can pop into hairdresser Johnny’s Chop Shop for a trim or beard shave.

There is also plenty to admire when it comes to the product on offer at both stores, but particularly at Topshop. Seasonal trends that should appeal to the retailer’s young target demographic – such as silky slip skirts (£35) and camouflage utility trousers (£42) – are well represented.

Topshop’s problems, however, start when you look at the number of competitors battling for – and indeed, stealing – a share of the youth market. Rapidly growing rivals have knocked Topshop from its throne. Those looking for catwalk-inspired fashion on a shoestring budget are ably served by Inditex’s Zara, while etailers such as Boohoo, PrettyLittleThing and an ever-increasing plethora of fast fashion players offer price-conscious shoppers the latest trends at lightning speed.

Increased competition is even more of a problem for sister brand Miss Selfridge. Its Oxford Street flagship, next door to Topshop’s sprawling space, is dominated by rails of discounted product.

Although pretty and feminine in places, overall the offer feels like a less trend-driven take on the same products as Topshop. There’s no real point of difference that would encourage shoppers to visit this retailer over all the others jostling for space on the high street.

Miss Selfridge’s lack of personality is reflected in a relatively small social media following – it has 630,000 Instagram followers, compared with Topshop’s 9.7 million, Asos’s 9.3 million and PrettyLittleThing’s 10.7 million. The fascia is missing a personal connection and strong sense of brand that will encourage shoppers to part with their cash in today’s market.

A lack of clear design handwriting is also a problem at Dorothy Perkins and Wallis, especially when coupled with underinvested and unexciting stores. Both the retailer’s stores on Oxford Street are nicely presented – there are marble feature walls at Dorothy Perkins and bright, springtime windows at Wallis. However, neither are particularly innovative or exciting when it comes to both product and store design. Average is not enough in today’s retail industry and both brands need to do more to stand out from the crowd.

Green has previously pledged to invest £100m in the Arcadia Group in a bid to secure landlord and creditor support in the run-up to its restructuring. Investment, combined with fewer stores and lower rent bills as a result of the CVA, should result in a fitter, more streamlined business.

A refreshed Arcadia will need to excite and delight customers spoiled for choice in order to carve a successful future.

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