It is very sad to see our High Street being torn apart. Arcadia have been a powerhouse for many years, but in recent times they have been failing. They have been over reliant on store sales (which are now not open) and their online sales have lagged; they are simply not in touch with their target market.
Arcadia said the pandemic: “Has had a material impact on trading across our businesses.” However, this is the same for everyone else, so what have they got wrong?
Topshop, for example, is simply not what it was. In the not-so-distant past Kate Moss designed for them and that was a big hit at the time. But since then, Topshop has not done anything on that sort of scale. I expect they are sitting on a significant amount of stock they cannot sell.
The Group also has a significant property portfolio and, even before the pandemic, their target market were looking to follow online retailers like Boohoo and Asos. They have therefore been hampered by significant rent costs, and more importantly a weak digital presence.
Consumers want to see sustainable products from retailers now. Topshop has a fast fashion business model, mass producing garments cheaply and shipping them worldwide. However, many consumers are now very interested in firms’ sustainable practices.
If the brands within Arcadia Topshop, Burton and Dorothy Perkins are rescued, the new owners will need to do something very different.