SYDNEY (Reuters) - The British owner of fashion chain Topshop will keep its Australian unit open, company representatives said on Friday, three months after it appointed administrators amid fierce competition in the persistently soft retail market.
Arcadia Group Ltd, led by British fashion entrepreneur Philip Green, will buy parts of Topshop from its Australian franchisee and keep four of its stores running in the major cities of Sydney, Melbourne and Brisbane, administrators said.
That marks a trimmed-down version of the firm which until May had 17 stores in Australia with 760 employees. The new operation with four stores will employ just 290, administrators added in a statement.
The Australian operation’s former one-fifth owner, department store chain Myer Holdings Ltd (MYR.AX), wrote off its stake in July and will have no financial stake in the new business, they said.
Topshop arrived in Australia amid fanfare in 2011 but soon met fierce competition from other global “fast fashion” brick-and-mortar chains like H & M Hennes & Mauritz AB (HMb.ST) and from online giants such as Amazon.com Inc (AMZN.O).
Australian retail spending has meanwhile stalled for several years as wages have stagnated and household debt has swelled, largely as a result of a red-hot housing market.
“We are excited to operate directly in the Australian market and look forward to delivering unparalleled fashion to our customers,” Arcadia said in the statement.
Reporting by Byron Kaye; Editing by Stephen Coates