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business environment

Topshop and Zara in China

Why strategy matters

Ian Marcousé provides a comparison of the two fashion brands, which you can incorporate into your BUSS4 Section A research

Figure 1 Arcadia vs Inditex 2001–13
Source: Inditex accounts, Arcadia press releases. Inditex data converted from euros at £1 = €1.25

In November 2012 Sir Philip Green said that his Arcadia Group should be seen as ‘a great British success story’. The heart of Arcadia’s retail empire is Topshop, which Green took control of when he bought Arcadia in 2002.

Topshop is a retail jewel, with the potential to be huge internationally. It is a brand perfectly suited to the emerging middle classes in China. When Green took over Topshop, its size was comparable to another European fashion retailer: Zara. But in late 2013 Zara’s owner Inditex had over 400 stores in China and was the world’s biggest clothing retailer. Topshop has no stores in China and is a global minnow. What went wrong?

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