WWD.com/globe-news/retail-features/topshop-doubles-up-with-tokyo-flagship-1836634/
Outside Topshop.

TOKYO — Hennes & Mauritz may be erecting a tower in Harajuku, but Topshop is making its own statement a few doors down the same strip.

This story first appeared in the October 16, 2008 issue of WWD.  Subscribe Today.

The British fast-fashion brand has doubled the size of its flagship here and plans to open seven stores in the city over the next three years through a franchising agreement with T’s, a newly created company controlled by Mori Retail Systems and investment fund JBF Partners. Mori runs the trendy retail complex Laforet, where Topshop opened its smaller, trial store two years ago.

“It’s always been on our list of where we feel Topshop and Topman should be,” Topshop managing director Mary Homer said. “[The Japanese are] brave. They sort of break the rules and that’s really what Topshop is about.”

The newly expanded Tokyo store, which opens today, occupies more than 5,320 square feet over two levels and houses both a Topshop and a Topman. The previous smaller store was tucked into a second-floor corner of the shopping center while the newly refurbished digs feature a street-level entrance along the bustling Meiji street. The Laforet complex is almost directly opposite a large Gap store, another Harajuku landmark.

Hideki Takahashi, chief operating officer of T’s Co. Ltd., forecast the new store will post sales of 1 billion yen, or $9.8 million, in its first year of operation. That’s more than double the annual business of the old store.

The Topshop opening is the latest development on the fast-fashion landscape here. While department stores and many other retailers are suffering in the current macroeconomic climate, affordable fashion players are faring better. H&M opened its first store in Japan last month to much fanfare and the Ginza flagship is still attracting legions of local shoppers and busloads of tourists. The Harajuku outpost will open early next month, followed by a third one in Shibuya. Fast Retailing Co. Ltd.’s Uniqlo chain continues to show momentum. Just last week, it reported a 37 percent spike in fullyear net profits and an 11.7 percent surge in sales.

Homer said she would have been curious to see the local H&M in action, but believes Topshop’s fashion edge sets it apart from other chains. She’s more focused on keeping up with the hundreds of specialty retailers and local labels that populate Tokyo’s streets. “

The big competition will be the more independent brands rather than the big chains like Zara and H&M,” she said.

Homer, in Japan for the first time, is touring potential sites for new stores since the company is gunning to open its second store within six months. David Shepherd, managing director for Topman, said the company is canvasing all the major shopping areas of the city including Shibuya, Ginza and Roppongi.

Shepherd noted the trial store in Laforet received a “fantastic response,” which prompted management to strengthen its ties to the Mori group.

Meanwhile, Topshop is plotting further international expansion. Currently Topshop and Topman run a network of 185 stores in the U.K. and 70 abroad. Last year, it moved into Russia, its biggest foreign market outside the U.K. Next year, it will open its much-anticipated New York flagship. As for Asia, Shepherd said the company is posting double-digit growth in Singapore and Malaysia even though Topshop is relocating its flagship on Singapore’s Orchard Road. He added that the retailer is in talks with a potential distribution partner for the Hong Kong and Mainland China markets.