Hilton Seskin, franchisee of the failed Topshop/Topman venture in Australia, has spoken out about the role of the brand’s UK-based owner, Arcadia Group, in the collapse, saying he had “little control” over inventory coming into the market.
Speaking at an Australia-Israel Chamber of Commerce (AICC) event on Thursday, Seskin described his 2011 decision to enter into a franchise agreement with Sir Philip Green’s Arcadia Group as a “mistake” – revealing the round-about way in which products were sourced.
“[We had] very, very little control over what inventory came into the market,” Seskin revealed.
“Products made in Asia were shipped to the UK, put through a recycling plant – let’s call it a warehouse facility in the UK…and flown out to Australia.”
Describing the business model as “broken”, Seskin said his team tried to change things for years, but that the lack of responsibility taken by the franchisor in the venture hampered efforts to turn the company around.
Seskin handed the holding company for the franchise license over to administrators Ferrier Hodgson last month, owing to various creditors.
Since then administrators Ryan Eagle, James Stewart and Jim Sarantinos have been working closely with Arcadia group to secure a future for the company, negotiating a deal where Arcadia would take a controlling interest in the venture.
A spokesperson for Ferrier Hodgson told Inside Retail that administrators are currently reviewing a potential structure that would see Arcadia Group take control of the Australian business, but declined to comment on Seskin’s view specifically.
Inventory was one of the primary factors cited by analysts assessing Topshop’s collapse Down Under, with a consensus forming that products offered in Australian stores were unable to excite younger consumers.
“Topshop’s appeal was tarnished by higher price points and stock quality that fell short of expectations,” said Bettina Kurnik, senior retail analyst at Euromonitor International.
Seskin said he still believes in the Topshop brand and its potential for success in Australia, noting that the company performed extremely well initially.
“I still believe it’s an amazing business…unfortunately you make mistakes in life and perhaps the mistake that I never thought would be a mistake was getting into a franchise arrangement with a franchisor [which] basically had no responsibility,” Seskin said.
Arcadia Group declined to comment.
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