Arcadia has come a long way in the past two decades, maturing from a clothing newcomer to the young fashion powerhouse it is today.
One of the most obvious changes has been its name. The group’s roots are in the 1900s and it wasn’t until 1969 that it took the name of Burton, which it kept until 1997 when it was demerged from Debenhams and renamed Arcadia Group.
In 1988 Sir Ralph Halpern – who had hit the headlines for an affair with a 19-year-old model the previous year – was at the helm. Burton Group had just sold off the remains of its manufacturing interests, leaving Topshop, Topman, Dorothy Perkins, Evans, Burtons and Debenhams, as well as property interests it eventually sold in 1994 and a financial services division bought by GE Capital of America in 1990.
In the late 1980s Halpern was Britain’s highest paid businessman but by autumn 1990 he had left his positions as chairman and chief executive as the recession began to hit the fashion group. He was replaced as chief executive by joint managing director Laurence Cooklin, while Sir John Hoskyns became non-executive chairman.
Cooklin only lasted 15 months before being replaced by Texan John Hoerner, who had joined Debenhams as chairman and chief executive in 1987.
By 1993 Burton had shed its 43 Champion sports stores. This was part of a cost-cutting plan in which several full-time roles had been replaced by part-time ones and Expressions, a fascia launched six months earlier, was axed.
Hoerner also launched his Townprint programme to identify the best positioning for the retailer’s near-2,000 stores. By 1994 it had also closed its discount clothing chain IS, set up in 1991.
The cost-cutting paid off. In 1995 Hoerner revealed that each of the multiple chains had made a profit in the first half of the year for the first time in five years. The City was impressed, although Hoerner said he still had a way to go.
In 1996 the company bought clothing brand Racing Green and the Innovations Group to gain a foothold in the home shopping market. It unveiled its first website the same year and launched itself as an internet service provider three years later with the launch of Zoom, in an attempt to emulate the success of Dixons’ Freeserve.
Several new fascias were established in the following years: menswear offer Style Union – later rebranded SU214 – in 1997 and Wade Smith Jnr in 1998. Both concepts were eventually abandoned.
But the most significant event of 1997 was the formation of Arcadia Group itself. The move cut costs in terms of both staff and office space, so it was well supported by the City.
In 1999 the fascia range was extended further as Arcadia bought the Sears womenswear business – comprising Wallis, Warehouse, Miss Selfridge, Richards and Outfit – from Philip Green in a £151m deal. The City was not so impressed with this as it duplicated sites and offers and made Arcadia home
to 15 brands.
By the following year Green was said to be considering a tie-up with his pal, clothing tycoon Richard Caring, to bid for the chain, although they dismissed the talk at the time.
Hoerner, meanwhile, was busy with the BrandMax programme – launched following shock losses of £8.6m in April 2000 – which saw fascias axed or trimmed. But by the end of the year Stuart Rose, long mooted as a successor to Hoerner, finally took control.
The pruning of 300-plus outlets put Arcadia in better shape by February 2001, attracting the interest of Baugur. That autumn the Icelandic group made an informal bid for the business. But in 2002 Green was also circling and in October the group succumbed to his £850m advances and Rose was gone.
Green had gained a reputation as an asset stripper before his purchase of Arcadia (and Bhs before it), but in the six years he has owned Arcadia he has strived to maximise its domination of the young fashion market.
Most notable has been his signing of Kate Moss to design exclusive collections for the flagship Topshop brand. Last autumn, the eighth range by the supermodel was launched.
Green’s contribution to UK retail led to a knighthood in 2006 – the same year he launched the Fashion Retail Academy, offering courses to 200-plus students and part funded by Arcadia.
This spring Topshop’s first store will open in New York. The brand’s website has been offering tailored lines to the US market since last summer. Yet more proof that Arcadia has slimmed down, shaped up and come of age.