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The Last Nail in the High Street’s Coffin? What Brands Can Learn from the Collapse of Arcadia and Debenhams



As two giants of UK retail face their bleakest midwinter, we speak to people from across the industry about what insights might come from the catastrophe

The Last Nail in the High Street’s Coffin? What Brands Can Learn from the Collapse of Arcadia and Debenhams
In a normal year December is the peak of a retail company’s trading period. But this year the month kicked off with devastating news for the sector as two of the UK industry’s most prominent names have been brought low by the shift in behaviour that the Covid-19 pandemic has provoked.

The collapse of 207-year-old department store group Debenhams and fashion giant Arcadia (composed of several brands including Topshop, Miss Selfridge and Burton) could put the livelihoods of 25,000 people at risk and raises existential questions for the UK high street. 

What went so wrong? And what can brands learn to help them avoid the same fate?

Chief Strategy Officer 

As ever with any hot topic of conversation, nuance goes straight out the window and we retrench into binary arguments. With the latest news on Arcadia and Debenhams, it would be easy to proclaim that ‘Covid has killed’ the high street and brands should immediately shut all physical retail locations and go 100% online. But I don’t think it’s as simple as that. 

The decline in Debenhams and Arcadia started long before Covid. Soaring real estate costs, a lack of effective investment and a refusal to embrace the world of e-commerce are all factors that long predate the pandemic. But this doesn’t mean there’s no future for the high street. Just look at queues of people lining up outside Primark this week as it opened its doors for the first time since #Lockdown2. Primark being a 100% physical retail space brand has had a torrid year like most others, but recovery results after the first lockdown suggested that people are still willing to buy in physical locations. 

You only have to look at how independent high street brands have weathered the pandemic better than chains with a lower net closure rate of 0.5% compared to chains at 2.8% to tell us that physical retail experiences are still in demand. So, I don’t think we’ll see the high street disappear, it’s just likely to look very different. 

Oliver Feldwick, The&Partnership
Head of Innovation

It can be difficult to pick out the positive lessons from the collapse of Arcadia. It’s been hit by the perfect storm of shaky financial foundations, combined with the thin margins of fashion, the shifting sands of physical retail, all capped off with the Covid-19 crisis.
Hindsight, they say, is 20/20, but outside a crystal ball to pre-empt Covid, there is scant to learn. It is a cautionary tale of the need to invest in a business and reinvent your operating model as the world changes around you. It is perhaps also a warning for things to come in similarly affected industries.
Aside from that, it could be a time to look at the value of the brands separate to the value of the business. There is enormous value in brands like Topshop, Burton and Dorothy Perkins. Rebuilding those brands around an operating model designed for the current and future landscape could see a bit of optimism at the end of the tunnel.
But this will be of little comfort for the thousands of staff who are facing job uncertainty and pension gaps.

Bridey Lipscombe, Cult
Global Managing Director

Remaining relevant in a pandemic year was always going to be hard for brands that relied on footfall over e-commerce, and the fall of Arcadia is a sad end to an already miserable year for British retail. However the learnings are clear: good, solid, multi-faceted marketing strategies speaking to audiences in multiple places is the key to longevity, no matter the climate. 

Adapting fast and taking a hybrid approach has been the mantra of 2020 for marketeers and we've all been hitting fast-forward on digital evolution to keep up with the pace. Virtual try-on, sampling and augmented experiences have taken brands into the homes of consumers and this has ensured they remain integrated and relevant. The future of high street fashion is forever changed by this year, but this also provides a hotbed for innovation and adaptation meaning that retail will be the most accessible it's ever been in 2021. 

David Frymann & Sara Beech, Frontier, part of The Beyond Collective
Strategy Partner & Strategist

‘Glamour’ once named Topshop “The most glamorous place to shop on the High Street”, with Kate Moss and Beyonce among its fans.

So what can we learn from its heyday, when it was a true ‘audience age’ brand?
1. Experiences beyond the product
With its bright lights, DJ booth, nail bar, catwalk shows and makeovers, Topshop’s flagship store was an entertainment venue, enticing customers to spend on average 44 minutes there. 

Any retailer should always be thinking of inspiring ways to get customers to spend time with them, on or offline.   
2. Cachet is the company you keep
Topshop used to behave more like D&G than Debenhams. From catwalk shows at Tate Modern, to A-list partnerships to sponsoring Fashion Rocks at the Albert Hall. 

Being part of the cultural zeitgeist is a sure-fire way to be cool by association.
3. Leading means leaping
'The Face' called Topshop "a dream factory that initiates and innovates and creates its own fashion".
Topshop combined cutting edge design with cutting edge thinking. It introduced a vintage section years before Selfridges, brought personal shopping to the high street and pioneered live streaming a shoppable collection.  

Wayne Deakin, Huge
Executive Creative Director, EMEA 

Even before the current Covid situation, companies that were digitally and data mature were outperforming their competitors. What we are seeing is a deepening digital divide between many brands. 

Fashion by its nature is probably even more at risk as they are brands built on leveraging culture, style and staying on trend. 

This digital-first mindset and being super clear about what the brand’s purpose is all about are two focuses if a brand wants to be relevant and thrive rather than just survive today.

Emma Chiu, Wunderman Thompson Intelligence
Global Director

The high street is collapsing, but is that a bad thing? Outdated retail models that are not keeping up with modern consumers are having to cave in and close shop.
As shopper behaviours evolve into an era of intuitive retail, where commerce is seamlessly integrated into every touchpoint, retail is no longer just about having a store and e-commerce site (it hasn’t been about just that for quite some time)—it has progressed into social, text, algorithmic and AI commerce.
And change is not just in how people are shopping; expectations of a brand are too. Consumers are no longer simply seeking products and services; they’re looking for brands that resonate with them on ethics and values—the bigger, long-term picture.
After years of slapping a band-aid on a crumbling business, the pandemic was the final nail in the coffin for Arcadia and many businesses alike. It is unfortunate to learn the shuttering of prominent retail stores which will lead to the inevitable job loss for thousands of employees, but there is hope. As outdated oligarchs step out, there will be room for creative disruption in the form of smaller, better businesses and startups. 2020 has marked an end of an era for the high street as we know it but paving the way for a reinvented high street.

Jo Arden, Publicis•Poke
Chief Strategy Officer 

There’s lots to learn from the collapse of Arcadia. But it's Christmas, people have lost their jobs, an incredible British brand has died, and we’ve raked over enough collective coals in 2020. I think we should take a minute to remember what made Topshop so awesome in the first place.  

And let’s be clear, that wasn’t ever Philip Green. It was the line-up of visionary, uncompromising, collaborative and cool women who built the brand. 

Jane Shepherdson, inarguably the real talent behind Topshop (she preceded Green by four years) took all that she had learnt on the shop floor and used it to increase annual profits from £9m to £110m in just six years. She blended street style with high fashion by sponsoring London Fashion Week, which made TopShop a fashion force to be reckoned with. The heart of her approach? Knowing her customers inside out – what they love and hate, how they see themselves and want to be seen. She built a brand on proper, first-hand insight.  

Her and the legions of talented people that designed, sewed, stocked-up and served gave the brand heart. Topshop (and Arcadia more broadly) thrived in spite of a toxic boss for many years. We should celebrate their successes and not let this tragic story (like so many others) be dominated by the selfish actions of a morally bankrupt bully. 

Executive Director, Growth Studio

Much has already been written about Arcadia’s inability to transform their business to embrace a digital-first shopping experience. But that in itself is too simplistic. The shift from stores to sites has been years in the making, and although accelerated by Covid, there are smart and agile ways of pivoting quickly to meet new demands – this year has made that obvious. It’s almost not that they couldn’t change, but they didn’t want to. A stubborn I-know-bestness that permeates from Philip Green’s personality.
And this directs to the far bigger problem: cultural relevance.

For Green’s flagship, Topshop, he seemed to be a master of putting high street fashion at the heart of popular culture. I was in New York when he launched the Topshop store on 5th Avenue with Kate Moss. At a time of transient glamour, acceptable excess and accessible celebrity, Topshop could have been the ‘coolest’ mainstream shop on the planet. But for Topshop's 15-25 year old audience, what is ‘cool’ is in perpetual change. If icons are now Greta Thunberg and Timothée Chalamet, it doesn’t come by default from supermodels on superyachts anymore.

Martin Harrison, Wunderman Thompson
Strategy Partner

I think asking what we can learn about brands from Topshop and the Arcadia Group is a bit like asking what we can learn about nature by watching those films on the Sci-Fi channel with Tara Reid in them. 
It starts with something relatively sane, like too many shops. Then a rogue scientist (digital strategist) turns up with data and graphs and warns of a looming apocalypse. Which the arrogant and entitled throwback in charge of the operation refuses to accept. Maybe saying something like "you need to put that laptop away and join me in the real world" or "don't tell me how to run MY business!" 
As more and more people demonstrate that things are getting worse, the throwback insists that "he doesn't go by the numbers, he goes by his gut" and "all you pen pushers need to mix with some real people once in a while". He says this on teleconference from a private island somewhere. While chewing on a fat cigar. 
As tension builds, it turns out that the entitled throwback has fatally undermined the group through some grubby money-saving scheme - maybe the safety system doesn't work because he refused to upgrade it because he wanted a helicopter, or the foundations of the whole building can't withstand the coming storm because he used the money to buy a yacht. Does that sound too ridiculous? In short, he didn't invest in basic stuff that would have dealt with the coming storm, sharks, dinosaurs with lasers. Blame happens. Angry shouting commences. Then, Tara Reid. 
What can brands learn from Acadia? There's no Tara Reid. Run your business properly, or 13,000 people lose their jobs. Invest in digital, in stores, in brand, in people. Strong brands, like strong businesses, come from a collective effort, and a sense of responsibility to the future. In Arcadia’s case the brand, like the business, was fatally undermined by the dominance of one view. 
In this case, it's not a disaster film, it's just a disaster.

Michelle Whelan, Geometry UK 
Chief Executive Officer

I grew up with Topshop. Over the last few days I have had many poignant moments reminiscing about my firsts with Topshop. Platform boots, fake tan, the Kate Moss handbag, shopping with my stepdaughters, then goddaughter… but in reality it was all quite a while ago.  
If you had asked me 10 years ago, I would have said It was the high street fashion brand best placed to capitalise on the digital era. 
So, what happened to the brand that was so cool and relevant it was featured in Vogue magazine, and, in 2017 transformed Topshop Oxford Circus into a live runway with crowds of people gathering to watch the #TopshopLiveRunway show? 
It’s partly to do with disinvestment. But it almost feels like they simply gave up, allowing everyone else to pass them by. A story we’ve seen over and over again. 
So, what could Topshop (and the Arcadia group, and Debenhams, and many other businesses) have done differently? Some food for thought … 
  1. Disrupt your business model. 
  2. Really understand what you are good at. 
  3. Find ways to evolve the things you are famous for.  

 It’s that easy. And, unfortunately, also that difficult. 

view more - Trends and Insight
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LBB Editorial, Thu, 03 Dec 2020 16:09:33 GMT