Topshop’s New Zealand unit placed in receivership
Topshop’s unit in New Zealand has been placed in receivership, just months after the Australian arm of the fashion retailer suffered a similar fate.
Its two stores will stay open until a final decision is made on their ownership, said Top Retail Limited which runs the chain in New Zealand.
Topshop’s New Zealand and Australian businesses have struggled in tough retail markets.
High prices and unpopular stock from the British label has hurt sales.
The New Zealand business runs stores in Wellington and Auckland. It opened to great social media fanfare and long queues of shoppers two years ago, but has been hit by growing competition from digital retailers as consumers increasingly turn their backs on brick-and-mortar stores.
Both the New Zealand and Australian Topshop units operate as franchises, separate to their UK parent.
Chris Wilkinson, managing director of First Retail Group, said the company had been hamstrung by the franchise model, which pushed up prices.
And it seems local shoppers were not happy with some of the clothes on offer.
“Some of the lines that weren’t selling in the European market were coming to Australia and New Zealand, [because] the market is a season behind,” Mr Wilkinson said.
Clothes that were unpopular in Europe “could indicate why they weren’t selling here,” the Wellington-based retail analyst said.
He argued that the combination of higher prices and unpopular stock had prevented Topshop from succeeding in the fast fashion market.
“It wasn’t fast enough,” said Mr Wilkinson.
The same forces weighed on Topshop in Australia, and its operations were placed under administration in May.
But the chain, which opened in 2011, was recently thrown a lifeline from its British parent.
Four stores have managed to stay afloat after a restructuring in which Sir Philip Green’s Arcadia Group bought back parts of Topshop from its Australian franchise.
A soft retail market and competition from big brands such as Zara and H&M have challenged local fashion labels in the country.