NEW YORK — Get ready America: Topshop is on its way.
British retail tycoon Philip Green wants to make his mark in the U.S. and a Topshop flagship could open in New York as soon as next spring. He already has his eyes on a site, but declined to reveal details beyond saying it is 60,000 to 90,000 square feet in size.
“If we enter here, we’re not going to be low-key,” assured Green, the flamboyant billionaire owner of Arcadia, parent of Topshop, Dorothy Perkins, Burton, Miss Selfridge and department store British Home Stores.
Green has noticed the inroads other European retailers have made in the U.S. and wants a part of it. “Every retailer’s dream is to build a global brand. Look at what Zara and H&M have done. That’s exciting,” Green said.
In addition, Mexx, owned by Liz Claiborne, is rolling out in the U.S., while Spanish retailer Mango is eyeing the American market.
But Green is aware of the pitfalls and is in no rush. He stressed that a successful foray into the U.S. requires plenty of planning and getting everything in order: obtaining the right real estate, finding a local partner or company that would be critical in the logistics, staffing and back-office functions and even buying a cargo plane to ensure proper merchandise flow.
“We are not a public company. We can afford to take a longer view to get it right,” Green said.
A local partner for back-end functions and logistics is key, however. “Can we do here what we do in the U.K., which is deliver fresh merchandise three times a day at peak periods? We want to execute at the same level here we do there, and that means we need a partner here. We will pay the $20, $30, $40 or $50 million needed [to open stores here], but we don’t want to fail.”
Topshop operates about 290 stores, including the flagship, at Oxford Circus in London. There is also the Topman chain for men, operating 165 stores.
And America isn’t the only market outside the U.K. that Green is eyeing for Topshop. He admitted he is scouting for sites in Europe, as well. “But it’s harder to find sites of the size we need in Paris,” he said, indicating America was his first priority.
Green is considered one of the world’s most successful retailers, recognized for his skills as a merchant and in the art of a takeover, and Topshop is his most fashionable growth vehicle. He’s been in the business of buying and selling retailers for more than two decades.
He continues to meet with investors and those in the business of buying and selling retailers. He also has a relationship with Gil Harrison, chairman of Financo, who has been introducing Green to U.S. retailers and manufacturers. Green bought Arcadia in 2002 for $1.3 billion and British Homes Stores in 2000 for $320 million, and this year started a costume jewelry chain called Muse.
This week, Green was in town scouting real estate, visiting stores, schmoozing with retailers, and attending the Costume Institute’s “AngloMania” gala at the Metropolitan Museum of Art. “It’s all part of raising awareness of the brand,” he said.
After a Financo-sponsored luncheon with about a dozen ceo’s on Tuesday, including Michael Gould of Bloomingdale’s, Kip Tindell of The Container Store, Mackey McDonald of VF Corp., Lew Frankfort of Coach and Joseph Gromek of Warnaco, Green disclosed in an interview that he has one site here he is considering purchasing. He said he’s been looking at real estate in the 60,000- to 80,000-square-foot range.
Asked if he could predict when Topshop could open in Manhattan, Green replied: “If this site works, we could open in spring 2007.” However, recently he’s examined “loads of stuff” and rejected a site near Bloomingdale’s in SoHo last year. While not detailing any specific long-term plans for the U.S., Green said he’s interested in six or eight flagships and possibly shop-in-shops.
Green pointed out that Topshop’s 90,000-square-foot London flagship on Oxford Circus has sales on the way to $200 million a year, or more than $2,000 per square foot, and that the chain averages sales of $1,000 per square foot. “Say a store here clicked and we did $100 million that gave us another $20 million in earnings,” he said. “That means we have another business model to build on. It proves Topshop travels and we are in a completely different game then.
“We would like to have a go here. We’ve got a great team. Jane [Shepherdson, brand director] is very clever with getting knowledge of the local market. She finds her point of difference. She’s very good at creating the market.”
He also said, “We understand the real estate risk, but we understand the single biggest risk, which is the risk to the brand.” Its reputation could be critically damaged if the foray into the U.S. failed.
But Green stated that Topshop is “not an unknown brand. We work a lot with Vogue and other high-level publications” in the U.K.
While Topshop does have an international reputation for its fast-fashion, cutting-edge merchandise, it’s not necessarily a given that the day Topshop opens in the U.S., American consumers would flock to it, the way they did when H&M opened its first U.S. store on Fifth Avenue four years ago. However, Green is ready to familiarize more of the world with Topshop by taking its Web site international around the middle of June. “We are going to put the whole store online, internationally,” he said. Recently, Shepherdson was quoted saying that the U.K. Web site offers about 600 lines and the count will double once it goes international.
But Green emphasized that market maneuvers have to be undertaken in “an intelligently planned way. We are not looking to get rich quick. I think that’s the right thinking for a family business in the long game.”