Sir Philip Green has parted company with his Chinese franchise partner in a major setback for his ambitions to conquer the global fashion market with Topshop.
Topshop’s parent company, Arcadia, formed a partnership with online retailer Shangpin in 2014 that made Topshop and Topman fashions available to Chinese shoppers via an Asos-style website for the first time. Two years later they went further, signalling plans to open up to 80 stores together. As yet no stores have opened.
An Arcadia spokesman confirmed the partnership had ended: “Topshop Topman and Chinese franchise partner Shangpin, have reached a mutual agreement to an early termination.”
In December 2016 Green announced plans to embark on physical expansion with Shangpin, telling the Financial Times it was “the start of a unique, exciting and exclusive partnership that will cement Topshop and Topman’s mission of becoming truly global businesses”. The FT report said five stores would open in 2017 and if successful another 75 outlets could follow.
The Topshop Topman spokesman added that it still considered China to be a “hugely significant market for development”. “The company is currently exploring opportunities to further grow the brands in China,” he added. The Topshop brands will stop being sold on Shangpin at the end of November.
Topshop has always been the jewel in Arcadia’s crown but the 2017 accounts indicated it too was having a tough time as online rivals such as Boohoo and Missguided stole young, fashion-conscious shoppers. Turnover at Arcadia Group, which includes Topshop and Topman as well Miss Selfridge and Dorothy Perkins, fell 5.6% to £1.9bn, a decline of £113m.
Green’s reputation has been shredded by the high-profile collapse of department store chain BHS. The tycoon had owned the chain for 15 years before selling it to serial bankrupt Dominic Chappell for £1 in 2015 – a year before the retailer collapsed with the loss of 11,000 jobs.
The collapse of BHS prompted an inquiry by MPs and the pensions regulator into how the business had been managed and financed in the period before its collapse. The retailer had a pension deficit of up to £571m when it failed. Under substantial pressure, Green subsequently agreed to hand over £363m to the scheme in a deal with the regulator.
