Arcadia was once the most powerful player on the high street.
However, as details of the proposed restructuring emerge this week, Arcadia’s fortunes have reached a new nadir.
The root cause of its problems is a failure to keep up with the market and therefore, its customer.
Once at the forefront of innovation, the business missed a digital trick when it failed to embrace multichannel shopping and invest where its customer had already migrated to.
Embracing new channels such as social media, these players found a new way to talk to the younger customer and become part of their online communities.
Offline, Arcadia has also faced challenges. While the Topshop flagship on Oxford Street is a shining example of store innovation, many shops across the group portfolio look outdated and unloved.
Arcadia’s store estate remains too large and, like many other high street players, it has not scaled back at the pace of the market. As it attempts to restructure, its proposed company voluntary arrangement (CVA) suggests only 23 store closures and rent reductions and revised leases on 194. It has been met with criticism from the Pensions Regulator for not going far enough.
Product-wise, once one of the coolest and most relevant young fashion brands on the market, Topshop has lost its leading position. Gone are the days of Kate Moss mania, Beyoncé launching a sportswear collection with the retailer and its prominent position at the heart of London Fashion Week.
Despite all of this, there are still some glimmers of hope. When Topshop gets product right, it flies. Just this season, customers were crying out for another drop of the sold-out Topshop satin midi-skirt.
The Topshop flagship is still a magnet for customers and showcases the best of what the brand has to offer, driving customers in store through experiential initiatives.
Meanwhile, the sheer scale of the Arcadia operation gives it clout with suppliers who will want to support its reinvigoration.
The proposal to sell or close the international business will allow it to focus on its UK operation.
The business faces many challenges but there is much talent still at Arcadia. Let’s hope the restructuring is the first step to getting it back to its position as a leading high street player.