Reason to think: What will happen if we lose Topshop
More than a week now The site of the British democratic brand Topshop does not work in Russia. In other countries, not counting the UK, where during the "black Friday" there were technical problems, the site is functioning properly. We are concerned about what is happening and what future in conditions of crisis awaits the retail in Russia - and in particular Topshop. We tell why we really do not want to predict in advance the withdrawal of some brands from the market, but it seems that they will have to.
The representative of Topshop in Russia and Ukraine is the giant BNS Group. They are one of the leaders in the fashion retail market in Russia. The company was founded in 2008 for the retail and wholesale of clothing, footwear and accessories. The share of income of the BNS Group from this type of activity is 100%. BNS Group also grants franchising rights to the development of Calvin Klein Jeans, Calvin Klein Underwear, MEXX, Jennyfer, Michael Kors retail stores in Russia, Kazakhstan and Ukraine.
"First of all, I would like to dispel panic and dubious rumors about problems in the Topshop site. They are in no way connected with sanctions or the political and economic situation in the world. These are common technical problems that will be fixed soon. We are working to solve the problem of access, and soon the site will continue to work as usual. For now, we offer everyone who visits the site to visit the Topshop offline stores, where gifts and outfits for the New Year are already presented. "
Despite the encouraging official comment from a Topshop representative, a pessimistic forecast about the possible withdrawal of the brand from the Russian market cannot be ruled out. The fall in oil prices and the ruble, instability in the foreign exchange markets obviously have an impact on the profitability of companies associated with foreign purchases. They have to reduce risks. Consider: the British pound today costs 84 Russian rubles and has every chance to grow even more. Retail of this segment is simply in danger of unprofitability.
Representatives of foreign companies in Russia take on all issues related to the purchase, customs clearance, sales areas, hiring staff, back office maintenance, public relations and advertising. If the company's profit falls due to the course, the question arises: why carry a whale on yourself? Do not forget about the new law, which will affect retailers. According to him, additional quarterly fees are introduced in cities of federal significance, which are calculated based on the floor space occupied by the store.
Topshop is a company with a rather modest distribution in Russia, in contrast to the same Zara or H & M. Like the British and did not seek us. You can compare their performance with developing competitors. On December 11, the Swedes of H & M will open the 70th store in Russia in a row, last year they opened 15 outlets, and in this - another 17. The Spaniards Zara and Bershka have 82 and 81 stores in Russia each. In 2014, Zara had 8 new outlets, Bershka - 12. The British Topshop did not open new stores either this year or in the past and do not plan to open in the future. Topshop jokes that stability is their motto. We really want to think the same.
A total of 19 Topshop stores appeared in Russia and Ukraine since 2006. The brand’s “airbag” is located in Moscow, where Topshop has 8 outlets. However, this amount may not be enough to keep a business afloat during a crisis. We have not seen a clear development policy for Topshop in Russia. So, Topshop still does not have a local online store, unlike the aforementioned competitors. Given the collapse of the ruble, it is strange to speculate about its launch in the near future. According to the Association of Online Trading Companies (ACIT), Russians prefer to shop in cash and in Russian online stores.
Today, many companies from Apple, Mercedes-Benz, Volkswagen to IKEA and McDonald's are revising their prices. Some of them do not exclude that the rise in prices may be up to 15%, if the fall of the ruble does not stop. Perhaps the Topshop site was closed due to a revaluation of things and reopened for us, having stamped the course and cost. Does the brand boycott the policy of Russia in this way? Professionals will say in chorus: "Why, because this is the open position of Great Britain and the West?"
"BNS Group is a heavyweight company. It will not allow to leave the Topshop market. Although nothing can be ruled out. It’s another thing that Topshop themselves can refuse a representative company and enter the market independently from scratch. Now everything is possible. A Russian company is unlikely tolerate a decrease in margins on the back of a frustrating pound exchange rate. Mass market retailers have lower margins than the manufacturer, respectively, and lower profits. In a crisis, prices rise, sales fall, business dies. Many Russian companies have preferential terms - deliveries from the outside For example, a manufacturing company delivers goods to the store in June, and the seller must pay at the end of December. Prices are paid to the purchaser's budget in June, and it is calculated in December using the December exchange rate. Therefore, receiving delivery in June by 600 thousand rubles, in December you pay a million. Loss on the course - 400 000. Profitable? No! "
By the way, in November, the British brand of women's clothing New Look ceased operations in Russia and Ukraine. Obviously, brands with a retail network with an average of up to 20 stores are leaving Russia. Care and self-return Topshop can not be excluded. That is what River Island recently did. The British company has closed stores in Russia and Ukraine. The retailer Maratex in October this year put up for sale 12 outlets River Island (slightly less than that of Topshop), located in Kiev, Moscow, St. Petersburg and Yekaterinburg. A year ago, it was possible to gain 18 million euros for them, but now their value has fallen threefold (!). However, the British River Island are going to enter the market independently, without Maratex and intermediaries.
If Topshop is closed (hopefully not), our choice will become poorer and duller. It is the only mass-market-brand that collaborates with progressive British designers and supports young ones on the Fashion East, NEWGEN, MAN platforms. Thanks to Topshop, budget versions of designer items fall into our wardrobes - from Ashish to Marques'Almeida. However, there were no loud launches of these collaborations in Russia, compared to advertising budgets and excitement around the H & M collaborations. At the same time, the limited Topshop collections deserve more attention, but in Russia they find little understanding among buyers. More reasons why we love the British? You are welcome!
During its existence on the Russian market Topshop half the country dressed. When the European mass market just appeared in our stores in the mid-2000s, Topshop differed in its distinctly British style. and collections with Kate Moss. Remember the first purchases of Zara and H & M - they were depressing. Who in Russia, except Topshop, in the mass market boasts the services of stylists, and in particular, VIP stylists (this service was recently introduced by the brand)? In Topshop you can always buy beautiful and high-quality shoes at reasonable prices: from affordable slipons to strong lace-up shoes and steady heels.
In Topshop, we go for mom-jeans, leather jackets, funny fur coats, coats and accessories - from chokers in the style of the 90s to funny socks. Topshop delights students and stylists discounts. In the men's Topman line, we buy basic shirts, turtlenecks and T-shirts. Only in Topshop you can find things for different shapes: the brand has lines for tall (Tall), thin (Petit) and pregnant (Maternity). Topshop is the only one from the mass market who has been participating in the official schedule of London Fashion Week since 2005, and in the brand's shops you can find the Unique podium line - it is created under the auspices of creative director Keith Phelan - and the Boutique line, which presents limited items from quality materials . After all, great music always plays in Topshop stores. Be that as it may, what was the real reason for the collapse of the brand’s website, we will know closer to the end of the year. At least, so promises the press service in Russia. Keep your fingers and hope that the British will stay with us for a long time.
"In general, the situation in the mass market is not very good now. Still, now everything is moving towards simplification and development towards civilized shopping. Absolutely for everyone it’s much better if the product is adequate in price, quality and relevance to everyone, including online. It is always better for the industry to have more supply. Those who avoid panic and continue to work constructively will remain on the market. In Russia, a natural increase in prices for all imported goods is expected in this segment. Naturally, someone will accept more radical noe decision. The buyer will be a bit more careful, but it will return in due course to their seats. "
