NEW YORK — Topshop jumps into midtown Manhattan’s retail fray at noon Wednesday when the London-based retailer opens a four-level flagship on Fifth Avenue and 49th Street.
This story first appeared in the November 3, 2014 issue of WWD. Subscribe Today.
It will be Topshop’s second-largest store, dwarfed only by the 90,000-square-foot flagship on Oxford Circus in London. According to sources, the London site generates $250 million in revenues annually, and the Fifth Avenue store, with 33,000 square feet of selling space, or about one third that of the Oxford Street flagship, should hit at least $80 million in sales, being situated in one of the world’s densest retail districts.
“You can just feel the foot traffic,” Sir Philip Green, Topshop’s owner, said as he toured the site Saturday, encouraging his managers to make some tweaks, and greeting the bevy of personal shoppers on hand to attend to the preopening private shopping. As he peered through a big window looking out on Saks Fifth Avenue, the Michael Kors store and the parade of tourists and local shoppers, it was obvious Green loves the landscape, and the Topshop build out. “Every retailer wants to get a great site on Fifth Avenue. It’s where you want to put together a great story. We’ve been patient,” said Green, of the retailer’s multiyear quest for a second site in Manhattan after it opened downtown five years ago.
Size matters too. “In terms of this location, we can show off the range of what we do and the store is easy to shop,” Green said. “It doesn’t feel inhibited. There’s very good ceiling height, good natural light from the windows down the side of the building, and we extend 100 feet [west] down the block. What we try to do with all of our flagships is something fresh and new. We don’t want them to look the same. That’s the challenge.”
Asked if Topshop will sap business from Saks, which is caddy-corner on Fifth, Green replied, “Everybody taps into everybody’s business. I just really like being on this side of the street,” by Kors and Rockefeller Center. “Saks is focusing harder on the fashion customer. That will be good for us.”
Asked to project the store’s volume, Green declined. “I’m a retailer, not a clairvoyant. But you’ve got to be a clairvoyant when you sign the lease.”
Some specialty retailers and designers regard their Fifth Avenue sites as marketing ventures more so than profit makers, given the area’s high rents, construction and operating costs. With Topshop, Green insisted, “It’s absolutely not the case,” though he wouldn’t discuss how the flagship’s numbers are seen playing out.
Topshop opened its first U.S. store in SoHo, on Broadway and Broome Street, in April 2009. That launch was beset by construction and permitting delays. Fifth Avenue has been no cakewalk either, Green acknowledged. “They’re all tough,” to get off the ground, he said. It took a long time for the right Midtown site to become available, partly because it involved a few businesses vacating the location, including Lacoste and a few restaurants. “This has been a long journey,” Green said. “There is nothing simple in New York. Nobody understands the word ‘easy.’”
On Saturday, the merchandising over Topshop’s four levels seemed complete and filled with sparkly Lurex skirts, sequined jumpsuits and beaded evening dresses, sexy miniskirts with fringe, animal-print leggings, skinny and “ultraskinny” flat-front and five pocket jeans, festive, faux-fur stoles and fur-trimmed parkas. There’s also a “boutique” department for clean, contemporary outerwear, silk dresses and tops that lend a balance to the aesthetic. Ninety-eight percent of the product in the store is under the Topshop and Topman labels.
Up front and sprinkled throughout are what’s labeled “Fifth Avenue exclusives” with 75 stockkeeping units in women’s and 60 in men’s, including sequined and beaded evening dresses, priced $475; sheer embroidered dresses for $495, as well as sequined jumpsuits, men’s wool trenchcoats and long, lined men’s tuxedo jackets.
Noticeably absent were sales signs. “That’s not our business,” Green said. “We are a fashion business. I’d like to think that we stick to our knitting.” That includes keeping prices low, with a range generally running from $40 tops to $400 to $500 for the highest ticketed dresses, men’s suits and outerwear.
Though Topshop doesn’t like to be lumped into the fast-fashion category, it does put a premium on quick changes on the selling floor for frequent newness. “We’re running this store on one of the tightest store turns in America,” Green said. “There will be new styling in here every week,” altering about 20 percent of the floor presentation each week.
The store, while not lavishly appointed, has visual drama, with a massive 45-foot-wide backlit graphic in the rear of the store, and giant photos of model Cara Delevingne, who is currently the face of Topshop, and the first solo face of the brand. There are hanging lamps everywhere, and mannequins, about 65 in total, spotlight the mix-and-match approach, and the four overarching merchandise directions: going out on the town, casual, formal and workwear. “It’s about outfit building,” said Mary Homer, managing director of Topshop. “We give suggestions on different ways to wear things, like wearing the $150 sequined blouses with either a pair of jeans or some animal print leggings. We cover all the fashion trends of the season but the beauty lies in how you want to wear it, in an individual way.”
It’s an eclectic, youthful assortment, for head-to-toe dressing. While item-oriented, there are several categories where Topshop buys into in a big way, like denim, which in women’s is offered in seven fits — the best-selling being the Joni flat-front skinny silhouette; the Leigh five-pocket skinny in lighter denim and the Jamie high-waisted five pocket style. “We’re making all of our denim in Europe. We could go to Asia but we decided not to,” Green said.
Outerwear, including parkas and blanket capes, and dresses are also big volume drivers. Topshop is seeing strong sales on such items as fur trimmed parkas, ankle boots, over-the-knee boots, capes and jeans.
In Topman, bomber jackets, peacoats, open-knit cardigans, overcoats, black skinny-denim jeans, heavy and fashion boots, are among the bestsellers. “We lead in with tailoring. In the States we do well with suiting, particularly with the young business guy, young business analysts who want to look fashionable, rather than the hedge fund executives dropping $2,000 or more on a suit,” said David Shepherd, managing director of Topman.
Topshop’s U.S. expansion marches on, although perhaps slower than Green wished when the retailer first entered the U.S. Finding the right sites has proven difficult, so in an unusual move, Topshop linked with Nordstrom to open shops-in-shop in Nordstrom stores. At the same time, Green sold a 25 percent stake in Topshop and Topman to Leonard Green & Partners.
“We just opened San Diego two days ago and have signed leases in Atlanta and the Houston Galleria,” bringing the U.S. store count to eight. Green said. “We are now in 51 Nordstrom stores with a conversation that the number could be bigger. We are also looking to step up our online business here, and ultimately we would like to do fulfillment here,” by opening a distribution center in the U.S. rather than continuing to ship from the U.K.
In addition, Topshop and Beyoncé Knowles have formed a 50-50 joint venture company, Parkwood Topshop Athletic Ltd., to produce an athletic streetwear brand, as first reported by WWD on Oct. 27. It could launch in stores and online in fall 2015 at the earliest. Topshop has 330 stores in the U.K., and is approaching 500 worldwide. Topshop and Topman are under Green’s Arcadia Group Ltd. umbrella.
“It’s always been a careful strategy — a considered approach,” Green said. “The company is in very, very good financial health. We have no bank debt and lots of money to expand.”