Arcadia Group, owner of the Topshop and Miss Selfridge fashion brands, has confirmed it is mulling options for the business to “operate in a more efficient manner” – but says all payments are continuing to be made to suppliers as normal.
Press reports emerging last week suggested the group is looking at options for 67 of its 570 UK stores, with branches including Topshop, Dorothy Perkins and Miss Selfridge being shared in property circles to see if rival chains can be persuaded to take over the leases. The total number of stores being reviewed by Arcadia is likely to be larger according to The Guardian.
Profits at the fashion group owned by Sir Philip Green have fallen sharply in recent years, dipping to GBP148.4m (US$198.8m) in the year to 26 August 2017, compared to earnings of GBP213.1m in the year before.
In an email to just-style, an Arcadia spokesperson said: “Within an exceptionally challenging retail market and given the continued pressures that are specific to the UK high street we are exploring several options to enable the business to operate in a more efficient manner. None of the options being explored involve a significant number of redundancies or store closures. The business continues to operate as usual including all payments being made to suppliers as normal.”
No detail was provided regarding options for specific branches, with the spokesperson adding “no other statement has been made.”
Elliott Jacobs, director at global commerce services provider LiveArea, says: “Arcadia is a classic case of a business that was too slow to react to a constantly evolving market.”
“The business simply did not have the flexibility or foresight to right-size itself when customer behaviour changed. The rise in prominence of online and mobile buying didn’t happen overnight. Some businesses, like Arcadia, are simply not set up for change. They will not be the last to close stores, with a vast number of large retailers looking to cut high street losses. Some are doing it when leases are up for renewal, while others are scrambling to close stores as quickly as possible. Either way, retailers need to look at their entire commerce strategy and prioritise future-proofing their brand. Today, digital must be the priority. Only by investing in building out their online capabilities will companies be able to adapt to, and predict, market changes – from the rise of mobile and social to the emergence of voice command devices.”