Asos hoping to crack America with Topshop two years after Philip Green’s attempt ended in disaster
Topshop will make a fresh assault on the American market two years after Sir Philip Green was forced into a humiliating retreat.
The brand’s new owner Asos has launched a joint venture with US retailer Nordstrom which will see Topshop clothes sold in stores for the first time since its parent company, Arcadia, collapsed last year.
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It is Asos’s first major strategic move since it bought Topshop, Topman and Miss Selfridge for £265million in February, and will mark a new effort to crack the US.
American dream: Former owner Sir Philip Green (pictured with Topshop model Kate Moss) failed to conquer the US market
The tie-up is also the first time Asos has struck a deal with a retailer with physical stores, having always only traded online in the past.
Sir Philip Green’s American experiment became one of the defining failures in Topshop and Arcadia’s demise.
The tycoon hatched a plan to go stateside at the height of his powers with the aim of pulling in $1billion of sales within five years.
He launched to a fanfare in 2009 with a Manhattan party, which counted rapper Jay Z and singer Debbie Harry amongst its guests, followed by a glitzy ribbon-cutting event with Kate Moss.
Hundreds of shoppers flooded in to buy the supermodel’s collection as music boomed from a DJ booth suspended from the ceiling.
Three years later he signed a wholesale agreement to put concessions in the relatively upmarket Nordstrom, which itself was struggling to attract younger shoppers.
By 2019, the US business was failing and Arcadia filed for bankruptcy protection, closing all 11 stores, at the same time as it closed dozens of UK shops through an insolvency process known as a Company Voluntary Arrangement.
Following the retreat, Topshop was left with just its wholesale agreement with Nordstrom.
Asos hopes the joint venture will turbocharge sales of Topshop clothes as well as its own brands.
The AIM-listed company already has a strong online presence in the US, with 3.3m active customers and sales growth of 16 per cent year-on-year in the six months to February 28.
But bosses said the joint-venture will ‘help drive the growth of these brands and pave the way for exploration of a new wider strategic partnership’, which will ‘build greater awareness and engagement’ in the US and Canada.
Asos will retain operational and creative control but will collaborate on reaching a larger customer base, including ‘an edit of the best Asos brands’ launching in-store and online.
Nordstrom will sell the brands on its websites and in its 350 stores. It will also allow shoppers to collect and send back Asos products at its stores from this autumn.
‘Partnering with Nordstrom will support our US strategy, allowing us to offer that to even more 20-somethings in North America,’ said Asos chief executive Nick Beighton.
The deal might also be seen as a test bed for similar partnerships in the UK or elsewhere as department stores seek out exciting brands to entice shoppers back in.
Like many other department stores, Nordstrom has suffered a tough few years as it faces increasing competition from online sellers, which have partly replaced their role in presenting a variety of brands in one place.
‘We’re excited about offering the Asos brands to our customers and we know we can help further amplify the recognition of the already popular Topshop and Topman brands,’ said Nordstrom president and chief brand officer, Pete Nordstrom.
The US is a notoriously tough place for UK retailers to conquer but analysts backed the decision by Asos. Analysts at Jefferies said the partnership looks ‘very sensible’ and will help it get ‘accelerated growth’ in the US.
John Stevenson at Peel Hunt said: ‘The mission for Asos is to drive US awareness, customer recruitment and penetration, which should be served well by this tie-up.
Over the next three-to-five years, we believe Asos has a tremendous opportunity to drive penetration in the US.’
Despite the news, Asos shares fell 1.7 per cent, or 80p, to 4755p.