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Topshop Going Global: NYC First Step in Chain’s Aggressive U.S. Rollout

America, make way for a nationwide Topshop rollout.

LONDON — America, make way for a nationwide Topshop rollout.

When the fast-fashion British retailer unveils the first Topshop/Topman unit in Manhattan in September, it will sound the opening shot in an ambitious plan to build an America-wide — and global — brand.

In an exclusive interview with WWD, Topshop’s owner, Sir Philip Green, said he is planning two more Manhattan stores, as well as flagships on the West Coast, and other units in cities including Las Vegas, Miami and Boston.

But Green wants to give as well as receive: In addition to building an American leg to his retail business, he hopes to find young American design talent to sustain and support in the vein of Topshop’s New Generation program. In London each season, Topshop sponsors the shows and collections of a clutch of young designers. Those names — which have included Preen, Marios Schwab, Christopher Kane and Emma Cook — have then gone on to create exclusive collections for Topshop.

“This is so exciting — I’ve always wanted to trade in America. It is a big adventure for me,” said Green. But even as that dream unfolds, he is conceiving another one beyond its shores. “We are now equipped — and ready — to move the brand on, worldwide,” Green proclaimed.

He said he’s ready to open Topshop stores in Paris and Milan, when he finds the appropriate sites, and is in talks to enter India. Green is also fielding requests from South Africa, Australia and Brazil, but said the reverse seasons may present problems. Topshop has 325 stores in the U.K., and 100 overseas.

Topshop’s first Manhattan flagship, at 478 Broadway in SoHo, likely will be the nerve center of Green’s burgeoning U.S. business. He has an option to take a 9,500-square-foot space on the building’s top floor to use as his U.S. office and said further store openings in America are likely to come sooner rather than later.

“As soon as we get our feet under the table here, the other New York stores could come quite soon,” Green said, adding he’ll need “about three to six months” to get the retail model right on Broadway. If all goes well in New York, he said, the rollout to other American cities could happen in the short term.

The new Topshop stores in the U.S. will be a minimum of 20,000 square feet and they all will be flagships. “I don’t want hundreds of little stores in the U.S. They all have to make economic sense,” he said.

The Broadway flagship will cover 40,000 square feet over three floors — basement, ground floor and first floor — and Green said he’s hoping to preserve the “spirit” of the brand’s iconic Oxford Circus flagship.

Green said he and his team are mulling the design for the Broadway store, but there likely will be a spiral staircase in addition to escalators, and customers in the basement will be able to view the two upper floors.

The retail mogul said he came within a hair’s breadth of signing for a site at 600 Broadway, but the landlords could not guarantee on-time delivery, and there were complex planning issues. He’s continuing to look at other sites around Manhattan, including ones on Fifth, Lexington and Madison Avenues.

“We’re still learning about Manhattan locations, and right now, uptown is too expensive — I don’t think we’d take enough money,” he said. “I don’t want to open trophy stores. They have to tick the right boxes on a commercial basis. And in the U.S., sales per square foot are historically lower than those in London.”

Green declined to offer sales projections for the Broadway flagship, but real estate sources here said, ideally, the store would rack up sales equal to those of the Oxford Street unit, or about $3,000 per square foot. Annual sales at Topshop’s Oxford Circus flagship are more than $250 million, according to real estate sources here.

On Broadway, Green has signed a 15-year lease with Steve Roth, chairman and chief executive officer of Vornado, which owns the site.

The tycoon also said he plans to continue wholesaling Topshop in North America. Green said he had an “ongoing dialogue” with Barneys New York — the first U.S. retailer to carry part of the Topshop collection — and that other American department stores are also interested.

Holt Renfrew recently has completed a trial of Topshop items, Green said, and it plans to carry the premium Topshop collection, as well as the Unique and Kate Moss lines for spring.

When he first unveiled his plans to break into the U.S. market, Green originally had wanted to undertake the project with a local partner. But he’s since jettisoned the idea. “We looked at various retailers and various ways of plugging into their back-office operations,” he said. “But, in the end, we thought we’re better off on our own. We’ve got more freedom.”

Green, a famously hands-on merchant and manager, said he is under no illusions about the challenges of entering the American market. He said he realizes, too, that managing a retail operation 3,500 miles from his central London base will be no picnic.

“We deliver one to three times a day at the Oxford Street flagship, and 100 new stockkeeping units every 14 days,” he said. “I can already envision the 10 p.m. phone call from New York about stock issues. I can see myself calling up the jet, and being in the sky by 1 a.m. — with a truckload of merchandise. Opening in the U.S. is definitely going to mean less sleep for me,” he said with a laugh.

He certainly wouldn’t be the first British retailer to lose sleep in America. Marks & Spencer tried, via Kings supermarkets and Brooks Brothers, to make it in the U.S., as have Aquascutum, Jaeger and Laura Ashley. All had varying levels of success, but none of them sustained lasting businesses.

M&S sold both its businesses, Aquascutum is only now making a comeback in the market under ceo Kim Winser and Jaeger began a fresh attempt earlier this year, selling through 11 Saks Fifth Avenue stores.

“It’s an extremely competitive market, and historically it has been a bit of a graveyard for some international brands,” said George Wallace, ceo of the London-based consultancy MHE Retail. “But some European brands have fared quite well there recently, notably Zara and H&M.”

Wallace said Topshop has its work cut out for it, but has major potential in the U.S.

“The Topshop brand has become quite well known, but you don’t make money by being on Fifth Avenue,” he said. “You make money by getting into the major malls, in places like Atlanta and San Francisco. How well-known is the brand when you’re outside New York? They have to establish themselves outside less metropolitan areas.”

Wallace added: “I think their fashion positioning would work quite well, coming at a time when the U.S. has got a couple of brands, such as Forever 21, that are on the fashion pulse. Express is also a key competitor, but they’re at the younger end of the market. Abercrombie & Fitch and Hollister have more of a surfy than a street look. I think Topshop does have the legs to be a global brand.”

In the U.S., Green said Topshop’s only choice was to be true to itself.

“We’re going to rely on our fashion offer, not basic T-shirts. And I think the beauty of Topshop is the wide demographic it attracts. You walk into the Oxford Street store and there are mums, daughters and people of every age and size shopping,” said Green, adding he doesn’t plan to alter Topshop’s prices substantially for the U.S. market.

He also has no plans to advertise in the U.S. as of yet, although there likely will be two or three events next year to mark the flagship’s opening.

“We know what the issues are in the U.S., and we know it’s not going to be easy,” said Green. “But if I want to build a global brand, there are going to be wins and there are going to be losses. That’s the nature of the fashion business.”