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Topshop to Open Chicago Unit

London retailer is preparing to unveil its second and largest U.S. store on Michigan Avenue.

A rendering of Topshop on Michigan Avenue in Chicago.

CHICAGO — Topshop is getting ready to open its second American store at last.

After opening a flagship in New York’s SoHo in March 2009, the London retailer is poised to unveil its second and largest U.S. store along Michigan Avenue here Sept. 7.

The 49,000-square-foot location, with just less than 35,000 square feet of selling space, is slightly larger than the unit on Broadway, which has 28,000 square feet. The newest high-profile corner location at 830 North Michigan Avenue represents a $10 million to $12 million investment, confirmed Sir Philip Green, the owner of Arcadia Group, parent company of Topshop and its men’s sibling, Topman.

The Windy City opening will coincide with ongoing international expansion for the British fast-fashion retailer, which plans to launch a 12,000-square-foot store in Toronto later in September, and a São Paulo location in February 2012. All Topshops outside of the U.K. are franchised except for the U.S. stores.

Green is also involved in lease negotiations in Australia and continues to scout sites in America. Green, who traveled to Arizona, Los Angeles, San Francisco, Las Vegas and New York before stopping in Chicago, said he would like to have eight to 10 U.S. Topshops within the next two years.

Topshop’s venture into the States has proved a learning experience, he admitted. “We’ve got about 70 to 75 percent of it right,” he said of the New York store. “We’ve still got a lot to learn.”

Green noted that certain colors, prints and categories have not sold as well in the U.S. as they have in Britain. He’s also grappling with holiday buying patterns in America. “We had an amazing Black Friday, but it’s a different peak,” he said, explaining that U.K. holiday shopping builds right until Christmas.

Specifically, Topshop executives said women’s and men’s denim, vests and men’s sneakers don’t move as well here as in the U.K. But men’s suiting and men’s shoes, excluding sneakers, perform better in the States. “Guys are dressing up more,” said David Shepherd, Topman’s managing director, noting that the store’s slim-fit Sixties-style jackets and trousers have been a hit. “At prom time, it’s fantastic.”

Overall, Green believes the key to success is maintaining unique merchandise. “We have to make sure it’s special,” he said. “We need to go back to the beginning when a designer or two [in-house] produced limited editions.” In that scenario, designers would produce 50 items unique to, say, Chicago or New York.

Chicago’s Topshop and Topman will maintain the look and feel of the brand’s giant 90,000-square-foot Oxford Circus flagship. “They want the iconic London experience,” said Mary Homer, Topshop’s managing director.

The three-level corner location, which was formerly a Borders bookstore, may carry more and heavier outerwear and boots taking into account the cold Chicago winters, but otherwise the inventory will not deviate much. “We don’t buy anything different specific to New York, although we may alter the mix slightly,” Homer said. “The bestsellers are the bestsellers everywhere, whether it’s Russia or New York.”

The retailer’s fast-fashion cycle allows for easy tweaking, she said. Topshop buys 300 new lines a week and 15,000 items a year. For fall, Homer predicts fur pieces and pencil skirts will be strong sellers, citing a $200 light brown faux fur coat and a $70 leather-trimmed silk print pencil skirt. “Dresses for the last two years have been enormous,” she added.

To mark the Chicago opening, the store will boast some 50 to 100 exclusive styles, including some Chicago-themed pieces such as a women’s polyester blouse with vintage city prints and matching pants or a men’s T-shirt featuring a hand-drawn map of the lakefront. Other exclusive items will arrive in Chicago for the opening and ship to New York and other Topshop flagships two weeks later.

Shoppers entering the Chicago store will encounter a sleek, urban decor, complete with a white tile floor, brushed steel, suspended glass fixtures and a ceiling partially covered by a mirrored Union Jack flag. The main level will feature clothing, ranging from holiday-ready $60 gray crushed velvet pleated tops and $210 cotton twill dresses with gold and silver beading to more casual $80 burnt orange cropped jeans and $70 houndstooth print silk pleated shift dresses. The main floor also will showcase handbags, accessories and makeup, including an exclusive nail color called “Windy City.” Downstairs, customers will be able to peruse the 2,000-square-foot shoe salon, lingerie and other apparel collections with the top floor housing Topman and a DJ booth. Green would not release projected annual sales for Chicago.

In addition to opening new stores (Topshop operates 140 stores in total), the retailer plans to extend its brand of irreverent youthful fashions through its wholesale business, with women’s wear having 12 to 15 accounts, and Topman 25 accounts with well-known retailers such as Fred Segal in Los Angeles, Opening Ceremony in New York and Colette in Paris.

The largest vehicle for growth, however, is e-commerce. Online sales for Topman, for example, nearly doubled from 2009 to 2010, with the men’s business up 30 percent so far in 2011, Shepherd said. Topshop.com ships to 104 countries, with online sales ranking second only to the Oxford Circus store.

Green, meanwhile, is waiting for the right moment to launch a Topshop home category and has considered building a Topshop house or apartment online. Homer also said Topshop executives have discussed the possibility of fragrance, but noted “there has to be a good reason,” or a clear niche in a market that Homer considers saturated.

At the same time, Topshop is looking to increase its social media presence and will likely launch promotions during upcoming local music festivals Lollapalooza and Pitchfork.

Social media will be an integral part of the Chicago opening, executives said, although specific plans have not been finalized. “Our customer lives in that world,” Homer said. “They’ve grown up in it. Their mobile, their iPhone, their Facebook page is their life.”

Although Green admits he’s not the most tech savvy (he has yet to purchase a smartphone, opting to keep two old wallet-thick Nokia phones), he’s hoping to position Topshop as a leader in social media. “I say it’s in the cake. It’s part of fashion now,” he said. “You ignore that at your own peril.”