As Sir Philip Green boarded his private jet for New York last week after celebrating his 57th birthday at exclusive London nightclub Annabel’s, he must have had just one thing on his mind.
Through the fog of a long night’s partying, Green was gearing up for one of the biggest weeks of his fashion retail career - the unveiling of Topshop and Topman in
On April 2, Topshop will throw open the doors of its US0 million (£14m) Manhattan flagship at 478 Broadway, marking Green’s first major stab at the US market. Rumours Green had hired a fleet of red London buses to drive through New York to promote the store are apparently untrue, but supermodel Kate Moss is set to appear at the opening. Green will certainly be hoping the hard work he has put into schmoozing New York’s fashion elite over recent months will pay off.
The launch of Topshop New York was delayed by six months after work on the store was hampered by red tape and building work difficulties. However, the globaleconomic downturn could prove to be Green’s biggest challenge in the US market. In 2006, when Green was first reported to have set plans in motion to launch Stateside, the US market was still very much living the dream. The economy was growing - GDP increased by 2.8% - employment was high and for the US retail sector it was boom time.
However, since Green signed Topshop’s 30,000sq ft New York unit, the US market has crashed. The sub-prime lending crisis originated in the US and the collapse of US bank Lehman Brothers in September is blamed by many retailers for the serious unravelling of the market in the second half of 2008, in which GDP grew at a rate of just 1.1%.
The waiting game Industry experts say that despite the credit crisis, Topshop is a brand that North America is hungry for, adding that fashion lovers have been chomping at the bit for access to the womenswear retailer’s trend-setting designs and European styling. Robyn Berkley, a fashion PR at New York PR agency People’s Revolution, says: “There is a great anticipation for the store to open.
Everyone is a huge fan of Topshop in my world and we are anxiously waiting.” Despite Topshop already having brand recognition in New York fashion circles, the fact remains that the US retail market is severely depressed. US Census Bureau figures show clothing and accessories spend last month fell by 6.5% to USStory text5.1 billion
(£10.3bn) against February 2008.
However, George Wallace, chief executive of retail consultancy Management Horizons Europe, said that he was reasonably optimistic about the launch of Topshop in New York. He said: “You can still thrive in the young fashion market. Plans to expand further into the US are more suspect, though.
French Connection has found it tough in the US and the US market tends to be a bit of a graveyard. Once you go into more provincial towns and cities the brand has less of a cache.” Green is looking to add two more Topshop stores in New York and also has plans to opens stores elsewhere in the US. He has cited Miami and Los Angeles as potential locations for the retailer.
So where will Topshop sit in the US retail map? It will go up against retailers such as fastfashion chain Forever 21, which interestingly is said to be looking at crossing the Atlantic to open in London, as well as teen chain Wet Seal and American Eagle Outfitters, a value young fashion chain. Also up against Topshop are US
young fashion retailers Urban Outfitters and American Apparel, and fast fashion chain H&M, which opened in the US in 2000.
Topshop’s US website, which launched in September last year, has given Green some idea as to how a bricks-and-mortar store might be received in the US. Items on the site include simple knitted cardigans which retail for US$40 (£27.50), trench coats at USStory text30 (£90) and a jersey day dress at US$55 (£38).
“It is fresh, new fashion at the right price,” said Faith Hope Consolo, chairman of retail leasing and sales at property firm Prudential Douglas Elliman Real Estate and the agent responsible for finding Manhattan stores for retailers including Paul Smith and Zara. “We are so excited. This is the right retailer, at the right time, with the right prices. New York is starting to bounce back and despite the climate, it’s spring time, and it’s time for a new beginning.”
Same-store sales in US for February
Abercrombie & Fitch -30%
American Apparel -9%
American Eagle Outfitters -7%
Wet Seal -6.6%