May 17, 2014

Topshop chain set for NZ launch

Topshop chain set for NZ launch

British fashion retailer Topshop is gearing up for major New Zealand expansion, with a central Auckland site secured for a flagship store – set to open this year – and big plans to establish a nationwide chain.

Kiwi designer Karen Walker has partnered with local clothing seller Barkers and Christchurch Rich Lister Philip Carter to form a new company, Top Retail, which has secured the rights to own, develop and operate the London-based brand, including its men’s offshoot Topman, across this country.

Topshop, majority owned by British tycoon Sir Philip Green’s Arcadia Group, is known for its “fast fashion” – affordable collections based on the latest catwalk trends – and collaborations with designers such as Celia Birtwell and Christopher Kane.

The retailer, which is the only high street brand with a scheduled spot at London Fashion Week, will this month release its latest collaboration with supermodel Kate Moss, a collection featuring everything from fringed jackets and suede shorts to beaded mini-dresses.

Walker has operated a small Topshop and Topman outlet inside Takapuna’s The Department Store since 2010.

She says the “store-in-store” – which offers only a limited range of products – has been wildly popular and taking the British brands to the next level has always been her plan.

“Anything you want you can get at Topshop,” Walker says. “We probably only buy about 5 per cent of what they put out [for the Takapuna outlet].”

A 1200 sq m Topshop and Topman store will open on the lower section of Queen St during the latter part of this year.

The bottom-end of the CBD’s main drag is becoming a hub for big name designer brands, with Louis Vuitton and Gucci already established there. Prada and Christian Dior have plans to open flagship stores in the area.

Walker says the Queen St store will offer the full Topshop and Topman ranges and new collections will arrive by air freight four times a week.

“They put out about 500 new pieces a week,” she says. “The makeup, the basics, the swimwear – every single thing they put out will be coming into that store.”

Topshop has a reputation for generating hype when entering new markets – shoppers spent hours queuing outside the brand’s Manhattan store when it opened in 2009.

Barkers managing director Jamie Whiting says Topshop and Topman outlets are planned for all of New Zealand’s main centres.

It is still unclear where the second store, on which work will begin within the next couple of months, would be located.

“Whether we do our second store in Auckland or go to Wellington or Christchurch, we really haven’t decided on that yet,” Whiting says. “Location is absolutely crucial – having the right space in the right retail area.”

Viva digital and fashion features editor Zoe Walker says Topshop’s expansion is good news for New Zealand and could make pricing more competitive for consumers.

It will accelerate the need for local designers and retailers to “adapt and re-evaluate what makes their brand special and to offer something original”.

“Topshop does do pieces that are inspired by the runway and local designers simply won’t be able to get away with doing that any more because consumers will be able to get the same thing at a much cheaper price,” she says.

Whiting says prices at the New Zealand stores will be roughly the same as those on the Topshop website, which is based in Britain and delivers to this country.

Barkers had spent 18 months considering opportunities for expanding its business, including creating a new brand and acquisitions, he says.

“The Topshop and Topman opportunity was just a perfect match for Barkers.”

The British brands were complementary to Barkers, and Topman is not expected to cannibalise Barkers’ sales as it was targeted at a younger demographic, Whiting says.

Walker says her namesake label is sufficiently differentiated from Topshop for the two brands to “sit next to each other quite easily”.

Topshop’s main competitors are expected to include the website of Spanish fashion retailer Zara – which is yet to open physical stores in New Zealand, although Walker said its expansion to this country was “inevitable” – and bricks-and-mortar fashion chains like Cotton On and Glassons.

Topshop’s physical outlets in New Zealand will also compete against the brand’s global website, which is owned and operated by Arcadia.

Whiting will not say how much Top Retail will spend on opening the Queen St and subsequent stores, but it is likely to be a sizeable sum. Topshop’s Manhattan store reportedly cost US$20 million.

Arcadia Group’s Green says Walker and Barkers’ experience would be “invaluable” to the British retailer’s New Zealand expansion.

“This is certainly a very exciting step in the continued growth of Topshop and Topman as global, yet uniquely British brands,” Green says. “I am confident that New Zealanders will enjoy the retail experience and fantastic products .”

Five Topshop and Topman stores already operate in Australia. Top Retail is 50 per cent owned by Barkers, while Walker and her husband Mikhail Gherman have a 25 per cent shareholding, according to Companies Office filings.

The remaining shares are owned by Crossing CBD, a company directed by Philip Carter – a Canterbury property investor whose wealth was estimated at $120 million in the 2013 National Business Review Rich List – and Mary Devine, the chief executive of Carter Group and former managing director of Christchurch department store Ballantynes.

Adams, Christopher. “Topshop chain set for NZ launch.” NZ Herald News. APN New Zealand Limited, May 17, 2014.