Arcadia Group aims to recapture Topshop brand after business is placed in administration
The Arcadia Group, which owns the Topshop and Topman brands, looks set to take back control of the businesses from Austradia after Topshop Australia was placed in voluntary administration yesterday.
Hilton Seskin, the veteran retailer who owns Austradia, has reportedly agreed to hand the company back to its founder Sir Philip Green, after discussions which have taken place over a number of months.
Seskin, who secured the local franchise from the Arcadia Group six years ago, has told the Australian Financial Review that the franchise model for fashion retailers is "broken".
He says it became clear the franchised business was unable to compete with vertically-integrated retailers such as Zara, H&M and Uniqlo, who have opened up dozens of new stores.
The administrative measures will enable Arcadia, Austradia, the administrators and Myer, which owns a 20 per cent stake in Austradia, to restructure the business faster.
James Stewart, who’s a partner at administrators Ferrier Hodgson, says the brand’s founder is keen to ensure that it remains a player in the market.
He said: "Sir Philip Green has expressed a very strong interest in maintaining the Topshop and Topman brand in the Australian market.
"The future operating model of the business will be determined by Sir Philip. Our current expectation is that the business may need some restructuring but that it will survive and prosper.
"He regards it as a wanted brand for the Australian market and a valuable brand for the Australian market.”
The business struggled with a number of issues, including the complexity of the supply chain and counter-seasonality and lost market share to its' rivals.
Austradia, which had annual sales of about $90 million, lost $3 million in the six months ending December, based on losses of $600,000 reported by Myer at its half-year results in March.
It’s not yet sure what the future of Myer’s stake will be but Arcadia Group is likely to maintain a concession agreement with Myer, which opened 17 Topshop and 17 Topman concessions in Myer stores after buying a 25 per cent stake in Austradia in September 2015.
"Sir Philip Green is very interested in maintaining the Myer relationship,” Stewart added.
Timeline: India takes unicorn leap with six in five days
We chart an historic week in India’s tech industry, where in just five days, between 5-9 April 2021, the country achieved six new unicorns, bringing India’s total to 10 in 2021 to date, an immense unicorn leap from just seven in 2020 and six in 2019.
April 5: Meesho
India’s first social commerce unicorn, Meesho raised US$300m from SoftBank, Facebook and Shunwei Capital, giving the Bangalore-based startup a US$2.1bn valuation, a threefold jump from its previous funding round in 2019. Founded in 2015 by two IIT-Delhi graduates, Meesho connects producers and resellers, helping small businesses sell through social media. It has 45m customers and has enabled 13m entrepreneurs to start their online businesses with no investment.
April 6: CRED
Founded just over two years ago, Bangalore-based credit card repayment app CRED raised US$215m from Falcon Edge Capital and Coatue, nearly trebling its valuation to US$2.2bn from its January US$80m round. Allowing customers to pay off their credit card debt while earning CRED coins which they cash in for rewards, CRED has grown rapidly during COVID-19, doubling its customer base to nearly 6 million in a year.
April 7: API Holdings / Groww
The first epharmacy startup to gain unicorn status, PharmEasy (API Holdings), which has digitised 60,000 brick and mortar pharmacies and 400 doctors across India, raised US$350m in a round led by Prosus Ventures. Founded by four former Flipkart employees as a way of making investing simple, investment platform Groww became India’s second-youngest fintech unicorn, raising US$83m in Series D funding led by Tiger Global, quadrupling its previous round in September.
April 8: ShareChat
New Delhi-grown social media startup ShareChat, founded in 2016 by Mohalla Tech raised US$502m from Lightspeed Ventures, Tiger Global, Twitter and Snap taking its raised total over six rounds to US$766m and pushing its valuation to US$2.1bn. The funding will be used to grow its user base and short video platform Moj, which launched in 2020 following TikTok’s ban in India. The regional language startup claims 280m users.
April 9: Gupshup
AI-led conversational message startup joined the unicorn club after raising US$100m from Tiger Global giving it a ten-fold valuation of US$1.4bn. The smart messaging platform, which has seen accelerated growth during the pandemic, was founded in Bangalore in 2005 by serial entrepreneur Beerud Sheth, whose online freelancing platform Elance is now listed. Gupshup’s API enables 100,000+ businesses to build messaging and conversation experiences across 30+ communication channels.