Sir Philip Green’s fashion empire Arcadia is no more, with its famous brands, including Topshop, carved up by online retailers leaving behind a ghost chain of 500 shops.
The sale to Boohoo of its last three high street names – Dorothy Perkins, Wallis and Burton – was confirmed this week. It completed the dismantling of Arcadia, which under Green’s ownership was the last vestige of the Burton Group built by 20th century retail trailblazer Sir Montague Burton.
Its demise raises big questions about the future of clothes shopping in the UK. People are going to be “quite shocked” when they go back to the high street, says Jane Shepherdson, who as brand director of Topshop in the early noughties was the most powerful woman in British retail.
“I don’t think people have realised what it is going to be like,” she adds.“If you think about the main high street in a city centre, there is a lot that has gone.”
The Arcadia store closures follow hundreds of clothing store closures last year with fashion shops, after betting and mobile phone stores, the most common type of retail unit to shut in the first half of 2020, according to the Local Data Company.
The Covid-19 crisis had a dramatic impact on spending in 2020. Clothing and footwear sales slumped by a quarter and for the first time more than half of the £40bn spent by shoppers was online.
While the balance of power will tip back towards physical stores once the lockdowns end, analysts at retail consultancy GlobalData expect that more than 40% of fashion and footwear will continue to be bought online, compared with less than 30% pre-pandemic.
Older chains with large store estates which had not invested enough in home delivery and online channels have suffered the most from the swift sea change in shopping habits.
Green bought Arcadia Group for £850m in 2002 and banked a £1.2bn dividend three years later, which remains one of the biggest pay cheques in corporate history, leaving the company with less to invest on keeping up with events.
At the time, Green was able to boast of a 10% rise in profits at his fashion empire which had 2,000 outlets and the prospect of a global brand in Topshop. By the time it fell into administration last year Arcadia was making losses, its store estate cut to 500 stores and Topshop but a shadow of the “It Girl” it once was.
Montague Burton must be “turning in his grave”, says Stuart Rose, the former Marks & Spencer boss who sold the then listed Arcadia to Green. “No brand has got the right to live forever but it could have had a better maturity than it has had. It is a sad end.”
However, to argue that retail is facing an existential crisis due to Covid-19 is to forget previous shocks such as the 2008 banking crisis and inflationary crises of the 1970s and 80s, says Rose.
“During every one of those eruptions there has been a shakeout and mostly what has happened is the weaker have died and the stronger have survived,” he explains.
In all likelihood no more mega shopping malls will be built and the high streets of the future will have fewer shops on them, but Rose says people “aren’t stopping shopping”.
“Arcadia and Debenhams have gone but the people who are left will probably do OK because there will be a bit more to go round.”
The carve-up of Arcadia prompted online fashion retailer Asos to snap up Topshop, deemed the jewel in crown, as well as Topman and Miss Selfridge for £330m. Boohoo paid £25m for the trio of Arcadia’s lesser brands.
Manchester-based Boohoo also recently bought the Debenhams name, again shorn of its 124 stores and army of 12,000 shop staff. It too was also once part of the Burton Group, in its day a FTSE 100 company.
Debenhams might be disappearing from the high street but rival chain John Lewis says shops have an important role, especially when it comes to fashion, with shoppers heading to stores to seek out advice from its personal stylists.
We get a “certain joy” from visiting our favourite shops, says John Lewis’s head of womenswear, Jo Bennett, who says customers like to physically browse clothes and shoes when they are putting together an outfit. “Many of us are looking forward to going out and shopping again.”
Terrible job losses aside, some of the brands disappearing from the high street were “not good enough for what we need now … and usually just made white men rich”, says retail guru Mary Portas. “Lots of people got made rich doing stuff that wasn’t exactly brilliant. I think we are going to see less but better.”
Although the online-only deals for Arcadia’s brands might suggest otherwise Portas believes teenagers and twentysomethings still want to buy clothes from shops.
“They just don’t want bland,” says Portas pointing to the busy stores of streetwear brands such as Supreme. “They have a cultural resonance and relevance to what’s happening today. They have put soul into the physical space and that is what we need to do.”
Shepherdson agrees that high street retailers will have to “up their game” to attract shoppers after the pandemic.
“I love shops myself,” she adds, explaining part of the thrill for fashion lovers is “seeing what other people are wearing”.
“It is really dull shopping online. I want instant gratification. I can’t believe that people don’t still love the social aspect.”
The shift to online shopping has left the UK with too many stores and even after the carnage wrought by the pandemic it is estimated there will be 25% more retail space than required.
In the future fashion shops might be less prevalent in town and city centres but analysts think they might spring up closer to home amid what looks like a permanent shift to home-working for many.
“If more money is being spent locally then we can reimagine what a local high street might look like,” says Lorna Hall, head of fashion insight at WGSN.
The darkest hour is just before the dawn, with Bank of England policymakers predicting Britons will go on a mammoth spending spree once restrictions are lifted.
“I suspect there is pent up demand because people have been saving money and they will want to get out,” says Rose. “There is a limit to how much you want to just browse through another bloody website.”