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Management responsible for Topshop closure

  • Opinion
  • September 12, 2017
  • Paul Keane
Management responsible for Topshop closure

As usual, local commentators discussed the receivership of Topshop in New Zealand with a wider view as to the future of bricks and mortar stores and the general opinion that the potential closure is bought about by the impact from online shopping. Sorry, I don't believe either of those scenarios is to blame.

Regardless of the experience of the owners, the logical answer is that management are to blame for the closure, regardless of a wider opinion. Any business is driven by daily then monthly then annual performance. Couple this up with a sensible long term strategy and the business will either fail or survive dependent on that level of performance. There have been many instances in recent years of retailers closing in the country after just a few years of operation. There are too many to discuss, but in all instances, management have been to blame rather than on line shopping.

"Top Shop was located in two excellent locations in Auckland and Wellington with superb exposure to pedestrian counts."

As a result, one would expect that the stores would have traded well and achieved a high level of sales.

Maybe, it really was a case of negative customer response driven by a level of merchandise that may have been less than appealing, both as to value and range. Most possibly, the merchandise was a far call from what the discerning New Zealand customer, who is well travelled would have expected from a typical Topshop offering.

"I am also of the view, that possibly the decline and quick exit of Topshop may well be due to the success of outlet stores."

A visit to the likes of Dressmart in Auckland's Onehunga will quickly reveal that most retail brands (and more) are represented, all of which are selling merchandise at less 70 percent of normal retail. Further most of these stores trade very well, which suggests that they have a following. So what's the message? The answer is value! If you consider the merchandise sold by Topshop, there is little that gives value to both price and range. Add to that the comparison to the range between the NZ brand Topshop and that of the UK and the answer is apparent.

I said earlier that NZ customers are discerning and are hard to fool. That is one of the principal reasons why Topshop did not necessarily appeal to its New Zealand audience. Let's not blame closures on either online shopping or the decline of bricks and mortar retailing. Sometimes the cause is more apparent.

 Paul Keane is a registered property professional and has vast experience in New Zealand’s commercial property industries. He provides retail and property consultancy including development management to many New Zealand property owners, developers and city councils. This post originally appeared on RCG's blog.

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