Memories of Kate Moss Aren't Enough to Revive Topshop Asos Boohoo H&M

(Bloomberg Gadfly) -- It's an open secret in the British retail industry that Topshop, the jewel in the crown of Philip Green's Arcadia Group Ltd, has lost its luster.

As Arcadia is a private company, it does not disclose the chain's individual performance. Instead, it is bundled up with Green's other brands. The group will report 2017 results in June.

But the recent news flow has not been positive. Arcadia is axing jobs in Topshop stores, and squeezing suppliers across its stable of businesses.

Topshop has been a fashion force for years, and its importance extends beyond its crucial role in Green's empire, which is still reeling from the collapse of the BHS department store chain. It has also been a strong competitor to major high street rivals -- but it doesn't look like they're getting most of the benefit from its struggles. Shoppers are flocking to online upstarts instead.

Memories of Kate Moss Aren't Enough to Revive Topshop Asos Boohoo H&M

Research from YouGov BrandIndex shines a light on what might be happening at Topshop.  The company, which tracks public perceptions of thousands of brands, found that it is losing out to both Asos Plc and Associated British Foods Plc's Primark. The trend is particularly apparent among younger, wealthier, shoppers.

Topshop has retained more of its appeal among older age groups. They likely remember the brand when it was in its prime years, around the mid-noughties, with high-profile fashion collections by model Kate Moss.

Memories of Kate Moss Aren't Enough to Revive Topshop Asos Boohoo H&M

Part of the problem is that customers don't think Topshop offers good value for money anymore. That doesn't necessarily mean the lowest price. It's more about customers feeling they get what they pay for -- or ideally more -- for a given outlay.

Memories of Kate Moss Aren't Enough to Revive Topshop Asos Boohoo H&M

There are plenty of cheaper alternatives now. As well as Primark, online only retailers such as Plc and privately owned MissGuided offer fast fashion at lower price points.

So who's winning at Topshop's expense? Well not traditional bricks and mortar retailers, that's for sure. That indicates it is the nimbler online upstarts that are capturing younger shoppers' spending.

Memories of Kate Moss Aren't Enough to Revive Topshop Asos Boohoo H&M

Topshop is not alone in finding itself in the squeezed middle. Hennes & Mauritz AB's namesake chain, where YouGov found former Topshop customers are particularly reluctant to shop, is suffering from the same pincer movement between the likes of Inditex's Zara and Asos at the more premium end of fast fashion, and Primark in the value sector. 

H&M has been been plagued by weak sales and a surfeit of stock. It is having to invest heavily to revive its core brand, bolster its online presence and develop new concepts. It has also embarked on its biggest shop closure program in at least a decade.

Topshop, which is 25 percent owned by U.S. private equity group Leonard Green & Partners LP, declined to comment.

At least it looks like it's making an attempt to turn around its fortunes, having hired a new chief executive officer from Burberry Plc, and a new creative director.  Topshop, when on form, had also been at the forefront of using social media to connect with customers, and seems to be trying to leverage this prowess, such as through its partnership with the hit Netflix show "Stranger Things." And, to be fair, Green has also been paring back the Arcadia store estate for some years now. H&M is only just starting. 

But, like its Swedish rival, it faces an uphill struggle to stay relevant. Cutting prices, and making sure its internet presence is up to scratch, would help. Although given younger shoppers' poor opinion of it, this may be too little, too late.

A turnaround requires big spending. The group invested 100 million pounds ($141.1 million) across its brands 2016. But Asos will spend twice that amount this year.

Green must dig deep to prevent the brand from slipping into oblivion. 

--Gadfly's Elaine He helped with charts.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

Andrea Felsted is a Bloomberg Gadfly columnist covering the consumer and retail industries. She previously worked at the Financial Times.

To contact the author of this story: Andrea Felsted in London at

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