Topshop Analysis

TopShop has a unique sense of fashion and is a trend setter that capitalizes on the fast moving fashion cycle. As new trends emerge, within weeks they can be found in TopShop stores and more recently TopShop has become a fashion leader with its own in-house designs. The proposed expansion into the US market forms part of a strategy of establishing TopShop as an international fashion brand.

TopShop's rumored move can be put down to the tough conditions of the UK retail market. The clothing market in particular faces tough challenges and, with low growth, is producing limited expansion opportunities even for young fashion retailers. Therefore retailers are forced to look elsewhere for ways to achieve long term growth.

The chain is not the first to look beyond its home and European markets. The retailer's European based rivals Zara, Mango and H&M, who also sell inexpensive, trendy styles already have branches in the US. But TopShop has the advantage of being the more cutting-edge fashion leader.

That said, the retailer is taking a risk. The US market is very different from the UK and European markets and also highly competitive, so if the rumors are true it will be interesting to see if the local market will buy heavily into the TopShop brand. However, the retailer has already had a bit of a flavor of the US market through selling exclusive designs from its Unique range at its fashion store Opening Ceremony in New York.

New York may well be a good option as it has the advantage of being one of the fashion capitals of the world, renowned for its style. The American consumer that's young, knowledgeable, trendy, fashion conscious with an appetite for uniqueness - and at relatively bargain prices will be waiting impatiently for TopShop's arrival. Likewise other middle market high fashion retailers - the competition will heat up for them if TopShop proves the success it is in the UK.