Failed Topshop, Topman stores closed as rescue bid continues

Administrators have shut five Topshop and Topman stores as attempts continue to rescue the failed fashion chain.

Topshop customer Mackenzie Nichols outside the central Sydney store. Picture: Hollie Adams

The future of failed fashion chain Topshop and Topman is in the balance after administrators closed five stores.

The closures include its flagship store in Melbourne’s Chapel Street, while Myer has also closed down all of its 17 concessions for the brand.

The shutdowns mark a worrying development for the future of Topshop and Topman as the shrinking business battles to survive after being put in administration in May.

Its hopes of remaining an operating business in Australia hang on British billionaire and “king of the high street” Sir Philip Green, whose Arcadia Group is the owner of the fashion brands and one of the collapsed company’s biggest creditors, owed nearly $9 million.

For more than a month the administrators of Topshop and Topman have been negotiating with Sir Philip to come to the failed retailer’s rescue, with the retail billionaire the most obvious white knight.

But a deal is yet to be struck, despite Sir Philip’s representatives visiting Australia recently to conduct talks and due diligence over the Topshop and Topman businesses.

As the clock ticks, the administrators, insolvency firm Ferrier Hodgson, have begun closing down stores that are either loss-making or not making enough profit to justify their existence.

Topshop and Topman stores at Sydney’s Miranda and Chatswood, in Perth, and at Highpoint and Chapel Street in Melbourne have now been closed. The Chapel Street store was a flagship site and staged the launch party for Topshop when it arrived in Australia.

“The priority for administrators remains to develop an appropriate operating model and structure that will continue the Topshop and Topman brand in Australia,’’ a spokesman for the administrators said.

“Remaining stores will continue to trade as business as usual as the administrators continue their negotiations with the Arcadia Group.’’

Meanwhile, department store Myer, which first bought a 25 per cent stake in Topshop in late 2015 hoping to leverage the label’s strong following among younger consumers, has closed all 17 Topshop concessions in its stores.

Myer’s stake was later diluted to 20 per cent after it declined to participate in a capital raising.

Topshop in Australia had sales of more than $90 million last year drawn from its nine stand-alone stores and 17 concession stores in Myer, and posted a loss of $3m.

The chains found it increasingly difficult to compete in the Australian fashion and clothing sector, as the market was awash with aggressive discounting and promotions as well as accelerating competition from other overseas chains such as Zara, Uniqlo and H&M.