University Babes Bolyai

Faculty of Economics and Business Administration

IBM International Business Management 2nd Year

-TOPSHOP International Strategies Final Project

Dumitrascu Elena
Onitiu Anamaria
Pascalau Anca Diana
Tatar Horatiu

Table of Contents
1.

Presentation of the Company ................................................................................................3

1.1.

Topshop Part of Arcadia Group ..................................................................................3

1.2.

Topshop phenomena .....................................................................................................3

1.2.1.

Short History .........................................................................................................4

1.2.2.

Stores and Flagship stores ......................................................................................5

1.3.

1.3.1.

Topshops Products................................................................................................7

1.3.2.

Topshops Services ................................................................................................7

1.4.
2.

3.

Products and Services ...................................................................................................7

Promotion ................................................................................................................... 10

External analysis of the environment .................................................................................. 11

2.1.

SWOT analysis ........................................................................................................... 11

2.2.

Porters five forces ...................................................................................................... 12

2.3.

Main competitors ........................................................................................................ 13

2.4.

PEST Analysis ............................................................................................................ 15

2.5.

Web site and criticism ................................................................................................. 16

Market Entry Strategies ...................................................................................................... 16

4. Definition of strategy............................................................................................................. 19
4.1. Locations ........................................................................................................................ 19
4.2. Suppliers ......................................................................................................................... 20
4.3. Employees ...................................................................................................................... 20
4.4. Logistics ......................................................................................................................... 21
4.5. Contracts to Establish ..................................................................................................... 22
6. Bibliography ......................................................................................................................... 23

Final Project International Strategies

TOPSHOP
1. Presentation of the Company
1.1.

Topshop Part of Arcadia Group

Arcadia Group Limited (formerly Arcadia Group PLC and Burton Group PLC) is a British
multinational retailing company headquartered in London, United Kingdom. It owns the high
street clothing retailers Burton, Dorothy Perkins, Evans, Miss Selfridge, Topman, Topshop,
Wallis and BHS, and the out of town chain Outfit, which sells lines from the other group chains.
The group has more than 2,500 outlets in the UK, concessions in UK department stores such as
Debenhams, Selfridges and House of Fraser, as well as several hundred franchises in other
countries. Arcadia Group Ltd. is the largest business interest of retailing magnate Sir Philip
Green, and is owned by his Monaco tax resident wife Tina, via a holding company, for tax
reasons.
Arcadias motto is the following: We break new ground by looking forward.

1.2.

Topshop phenomena

Topshop has undergone a remarkable transformation since the mid 1990s, changing from a down
market outfitter for the nation's teenagers to a seriously cool, trend-setting brand. Its success has
made Topshop a retail phenomenon on the high street, enjoying a huge growth in sales profits
and carving out a distinctive personality with an individual brand mix.

It continues to headline in nearly every fashion title and broadsheet, establishing a reputation for
bringing innovation and style to the high street. While many other retailers belatedly copy the
latest look, Topshop frequently sets the agenda.
Topshop, part of the Arcadia Group, is a British multinational retailer which specializes in fashion
clothing, shoes, make-up and accessories. It has around 440 shops across 33 countries and online
operations in a number of its markets. It is a very important player in the fashion industry.

Much of Topshops success lies in this perception and their ability to manufacture trends at
affordable prices in record time. Like the Spanish-owned Zara, Topshop succeeds by defying the
traditional retail model where clothes are bought months in advance of arrival of the store floor.
Pricing is another key for Topshops amazing success and another reason for its competitiveness.
The idea is not being cheap its about being affordable. The prices are in line or lower than in
online store. Like its main competitors, H&M, New Look and Zara, Topshop, have carved a
reputation, with its ability to pre-empt latest catwalk styles at affordable prices and with the
shortest possible lead times.

1.2.1. Short History

Although Topshop itself was launched in 1964, its parent company, The Arcadia Group, dates
back to 1900 when Montague Burton launched it with an investment of 100. Initially the
menswear chain Burton was the company's principal brand, but the launch of Topshop in the
1960s took the Group into the women's fashion market. It was a small start, with Topshop
initially only having space in a Sheffield department store called Peter Robinson.
A year later, the same store allocated Topshop space in the basement of its Oxford Circus store
in London. In 1974, Topshop was taken out of Peter Robinson and set up as a standalone
retailer, catering for 13-25 year-olds. In 1978, a boys' and young men's version, Topman, was
introduced and in 1982, Top Girl, for 9-14 year-olds. In 1992 Topman and Topshop combined
forces at 214 Oxford Circus to create the world's largest fashion store. In 1996, the shift in
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external opinion of the brand began when Vogue voted the Topshop Colour Cosmetics range the
best new high street range.
Two years later, the 214 Oxford Street flagship store was reopened as a stunningly refurbished
flagship store, welcoming 100000 shoppers every week. The brand's style credentials were
further underlined with the launch of a special 'Design Collection' in the store.
On 1 May 2010, Topshop opened its first New Zealand store. Located on Auckland's North
Shore, the shop sold out of some of its ranges before it had even opened. New Zealand designer
Karen Walker visited Britain earlier in the year and selected many of the pieces to be sold in the
New Zealand store.
Topshop expanded into Australia in 2011, with flagships opened in both New South Wales and
Victoria.
In November 2012, Topshop launched its first store in South Africa.
In December 2012, Philip Green agreed to sell a 25% stake in Topshop and Topman to the
United States-based private equity group Leonard Green and Partners for US$805 million.

1.2.2. Stores and Flagship stores

Topshop has around 440 shops across 33 countries and online operations in a number of its
markets.
Topshop is also represented by flagship stores:1

Flagship store - Definition: Of nautical origin, the term "flagship" refers to a ship which is the largest, fastest,
newest, most heavily armed, most well known, or the lead ship in a fleet.
When applied to a particular retail store, the designation of "flagship" is given to a retailer's primary location, a store
in a prominent location, a chain's largest store, the store that holds or sells the highest volume of merchandise, a
retailer's most well-known location, a chain's first retail outlet, a store location with decor or merchandise mix that is
distinctly different from the rest of the chain, or the store location in a chain which carries the most high-priced
merchandise catering to the most upscale customers.

 Oxford Circus, London

Topshop Oxford Circus is the flagship Topshop store in the United Kingdom and the largest
fashion store in the world. The store's features include a nail bar, a one-hour tailoring service, a
hair salon by catwalk hairdresser Daniel Hersheson, an EAT caf/sandwich bar, and a one-hour
delivery service whereby customers can place an order to the store and their products will be
delivered by Vespa scooter to them within one hour, providing that they live in the delivery zone.
Topshop Oxford Circus is roughly 90000 square feet (8400 m2) and covers five floors. The shop
attracts up to 30000 customers each day and around 200000 shoppers per week.
The Oxford Circus flagship store can sell 1000 of one style of item in a week, has 200 changing
rooms (as well as VIP private changing area) and 1000 staff work there at any one time.
Broadway, New York City
Topshop's first flagship store outside the United Kingdom is located on Broadway in SoHo, New
York City. The new store offers services similar to the London outlet. The New York store is the
brand's second largest store after the company's flagship store in London: the New York store is
roughly 60000 square feet (5600 m2).
Liverpool One, Liverpool
In the summer of 2009, Topshop opened its first Manhattan-style concept store in the United
Kingdom, in Liverpool, England. Located in Liverpool One, the new store provides 60000
square feet (5600 m2) of retail space making it the second largest store in the country. It is the
company's north of England flagship store and also contains Topman, an Office and Kurt Geiger
shoes outlet, and a Voodoo hair salon.
In October 2012, Topshop opened a 31000 square feet (2900 m2) flagship store on Briggate in
Leeds, which became the third-largest Topshop in the UK. It is one of only two stores in the UK
to offer a personal shopper service. It is part of the Trinity Leeds shopping development which is
due to be fully opened by March 2013.

 Sidney
In the 4th of October 2012, Topshop expanded in Australia by opening an impressive flagship
store on George Street. Housed in the heritage-listed Gowings Building the store commands over
1800 square meters of prime retail space offering consumers a four-floor shopping experience.

1.3.

Products and Services

1.3.1. Topshops Products

Topshop offers a wide range of products for its clients:

Clothes:
Topshop provide special clothes for pregnant women (Topshop Maternity) and a range of
products for children (Topshop Mini). They also have clothes for taller people (Topshop
Tall) or for shorter people (Topshop Petite).
Shoes: heels, flats, boots, premium shoes, shoe accessories;
Accessories: bags and purses, belts, collars, hats, scarves, gloves, jewelry, umbrellas,
sunglasses, hair accessories;
Make-up.

1.3.2. Topshops Services

A key ingredient in the brand's success has been its vision of shopping as entertainment. The
brand's stores around the UK all accentuate this concept, with the prime example being
Topshop's Oxford Circus store. It has its own video wall, Topshop Kitchen, Boutique, Vintage
and Nail Bar.
There are also frequent in-store events, such as seasonal catwalk shows, celebrity shoppers and
makeovers, all of which offer the Topshop customer a complete and exciting shopping
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experience. The formula evidently works, with visitors to the store spending on average 44
minutes inside.
There are currently three vintage clothing brands stocked in Oxford Circus, all providing a
different category of product from a high fashion brand with a 1960s and 1980s influence;
Vintage dresses and a traditional casual product range. There are also three vintage accessory
concessions featuring 1960s printed scarves and belts. Topshop's design label UNIQUE was
created in 2001 by a strong in-house design team.
The aim of UNIQUE was to create capsule collections to set trends and to dispel the myth that
Topshop's sole aim was to copy the catwalk. It was a success and UNIQUE soon began to build
Topshop's reputation in design.
Topshop has also created Boutique - a specific area in a selection of its stores to appeal to its
more designer-aware customers, celebrities and industry insiders. Boutique houses UNIQUE and
also the latest 'capsule' collections from designers, such as House of Jazz and Jens Laugesen
under the TS design label. There are now Boutique spaces at Oxford Street, Manchester,
Birmingham and in Topshop in Selfridges London and Manchester stores.
The British company provides certain services for its customers in order to satisfy best their
different needs and expectations. Some of these services are designed specifically for students.
The company also offers a special card for its loyal customers; the card has specific discounts for
the clients.
Other specific services Topshop provides for its customers are:
Services for student
Students get 10% off all year round for shopping in stores or online.
Topshop card
A fidelity card is todays most fashionable way to pay. Customers can sign up and
receive exclusive offers, discounts and rewards. They also receive mails and messages on

the phone when a new collection is launched or when there are certain discounts for loyal
customers.
Gift cards & sprees
Topshop helps its clients to give the perfect gift. The lucky recipient gets to spend in
store on whatever they like.
Personal shopping assistance
In order to feed the customers fashion obsession, Topshop offers a tailored Personal
Shopping appointment. The client is informed about the hottest trends, has access to all
the latest arrivals, outfit inspiration and he/she is even helped to build a whole new
seasons wardrobe. Best of all, the service is totally free.
Topshop i-phone applications
Customers can shop and share with their iPhone app. They can find all of their favorite
Topshop pieces and shop them wherever they are, then share them with their friends so
that everybody can check out their new style. Clients can even save items down in their
notebook to go back and look at later.
Mobile site
For clients who are always on the move, Topshop created an entire site just for use on
smart phones. No more fiddly buttons their mobile website is easy to use on a touch
screen and has all the pieces customers can find on Topshop.com.
Topshop does not only sell its products via its stores. It also trades via one of the most successful
fashion websites that was produced to recreate the Topshop attitude online. The site,
www.topshop.co.uk, now has a database of 120000 people with on average 180000 unique users
per week, doubling sales year-on-year.

1.4.

Promotion

Topshop believes that creative input is the key to staying fresh. It sets high goals for itself and is
constantly innovating and driving editorial, gaining genuine endorsements within the press.
Topshop also works with credible, creative teams and focuses its marketing strategy on bold
advertising campaigns, an example being the Vogue Catwalk Guide.
Its marketing mix broadly consists of authoritative advertising, gaining a word of mouth
reputation for cutting edge design, constantly innovating its flagship store in Oxford Circus and
sponsoring young talent.
Topshop is the single biggest supporter of young fashion talent in the UK and in the whole
industry, and its carefully selected sponsorship arrangements are an important aspect of its
promotional strategy, not only helping create the next generation of style gurus, but also adding
credibility and authenticity to its brand in the eyes of consumers.
As well as its title sponsorship of Graduate Fashion Week, Topshop is also the biggest supporter
of London Fashion Week and the sponsorship of the prestigious New Generation Award. Known
for launching the careers of 'fashion royalty', the New Generation Award has previously been
won by established names including Alexander McQueen, Matthew Williamson, Clements
Riberio, Antonio Berardi and Hussein Chalayan. Topshop has forged genuine partnerships with a
number of New Generation designers by working with them on special projects, including House
of Jazz, Sophia Kokosalaki and Markus Lupfer.
TS Design is another promotional strategy carrying real value for designers. This is Topshop's
own initiative, providing financial support to young designers by sponsoring their shows. In
return, the designers design a 'capsule' design collection for the in-house TS design label.
Topshop has gained a reputation for working with the most up and coming young talent. Other
previous sponsorship activities have included Topshop at Fashion Rocks. The huge fashion and
music event, hosted at The Royal Albert Hall in aid of The Prince's Trust, was an essential
destination for models and celebrities alike and, as such, was a natural fit for the Topshop brand.

10

The British retailer invests between 3% -4% of global turnover for advertising and promotion in
general.

2. External analysis of the environment

In order to assess correctly and thoroughly the entry strategy of Topshop on the Romanian
market, we must conduct an analysis of the external environment. This includes:
Main competitors;
PEST analysis;
SWOT analysis;
Benchmarking;
Web site;
Criticism;
Threats when entering a new market.

2.1.

SWOT analysis

One of Topshops strengths is belonging to Arcadia Group which manages several successful
brands, accessing to target markets with over 300 stores nationwide. It provides numerous
choices in product lines and design variety of products with thousands of looks per season
creatively. It also offers free personal style consultants, a factor that differentiates the company
from other competing brands. Furthermore, it has a up to date, user friendly website that makes it
very attractive to all customers around the world making shopping online quick and easy.
Customers from all around the world can benefit from Topshops iconic brands, due to the fact
that the company ships its merchandise to over one hundred countries worldwide. Moreover,
shopping online offers student discounts and free worldwide delivery on standard orders over
100 pounds. Furthermore, customers can subscribe to a weekly newsletter where they can find
out everything about sales, discounts and the latest trends. All of these make Topshop keep

11

awareness of customer preferences, form a customer relationship and focus on maintaining a

differentiated brand, thus creating a comparative advantage.
Topshop is a global company, but it has stores in few countries worldwide. A great number of
staff and a huge number of products and product brands make it a bit difficult to manage and
increase the management costs. It is possible that the big store space we encounter in Topshops
stores leads to weak customer services, if enough staff is provided this can be avoided.
Regarding internet shopping, there is no detail and size for the accessories that can be purchased.
This company has an enormous number of products that range from clothes for youngsters to
those for hip teenagers and finishing with white-collar workers. In Romania the number of
people that perform professional, managerial, or administrative work has tremendously increased
in the last few years, so Topshop does have a real opportunity by entering our market and as such
can get many potential consumers. Furthermore, middle aged people are more self aware and feel
the need to follow the latest fashions and be up to date. If they are willing to pay for these trendy,
accessible clothes, Topshop can take advantage of the opportunity it has. Customers have already
admitted brand awareness and the availability of shopping for more brands form an only (Top)
shop makes it easier for customers to gain satisfaction, by shopping from the Topshop store, or
from their website. These opportunities will of course, increase revenue.
Threats of this company are of course, represented by Topshops competition. Its competitors,
such as Zara and H&M are also fast fashion retailers who have already entered the Romanian
market and that have already built a well known brand name. If Topshop wants to be successful
in Romania, it is necessary to reflect its unique features and improved quality, maintaining a low
price and superior design. To some extent, H&M can be considered less fashionable and Zara
has a visibly higher price but these attributes do not exclude them from the competition.

2.2.

Porters five forces

We will now use Porters five forces, that will help is asses the competitive environment.
We will first observe the threat of new entrants that of depends on entry barriers and the reaction
of existing competitors. For Topshop, if the entry barriers are high, the threats of new entrants
will be low. For example, as a global brand, Topshop already has a large-scale, to some extent
12

and it can achieve economies of scale to decrease its costs, gain more profits with stronger
tendency. The new entrants without enough strength, it will be difficult to enter into the industry
and the threats will be low for Topshop.
Bargaining power of buyers is high, as buyers always want lower prices and more services and
always will bargain for high-quality. Topshop has to face the forces that come from buyers, but
Topshops products can satisfy customer demands. Topshop needs to craft products with a
reasonable price and high quality.
Bargaining power of suppliers, sometimes the costs of Topshop based on its suppliers. It is
unnecessary to worry about if Topshop has many suppliers because it has opportunity to choose
one which can offer lower costs. But, if fewer suppliers can provide goods and services for it, the
profits may be decreased as suppliers will ask for high costs and there is no space to choose.
There are products and services on the market that can meet similar needs. If Topshop cannot
meet customers demands, especially for price on the Romanian market, they will choose another
one. It has to work the pressure and adjust its price for maintaining its customers and profits also
on the Romanian market.
The intensity of rivalry can be monitored by examining its relationship to Zara, the closest
competitor for Topshop that has a slightly higher price and similar quality products, so it has to
face a strong competition. Furthermore, both companies have the same target market, young
people.

2.3.

Main competitors

When it comes to the fashion industry, competition is fierce. There are many companies with
different strategies to attract customers. The main competitors for Topshop are H&M, Zara,
Stradivarius, Pull and Bear, Bershka and New Look.
H&M is an important rival for Topshop because it is a very recognizable brand that exists in over
40 countries. In addition, H&M exits in the market for a long time (in was founded in the 40s)
13

and gained customers new customers yearly. According to the Data monitor report from the
Market line industry report of Swedens apparel retail industry profile (2009), which included
charted information about the revenues and profitability of H&M, the revenues from H&M have
increased each year. The revenue chart started in 2004 at about $10 million, and has risen to
about $16 million in 2008. Their profit margin dropped significantly from about 14.7% in 2004
to about 12.9% in 2005. Each year after that, the profit margin increased again and is basically
stabilized again at about 14.7% in 2008. Net sales reflect increased sales in several geographical
segments, especially in Switzerland, Germany, China, Italy and the United States. Net income
for the period was partially offset by increased administration charges and higher selling
expenses. In spite of the economic crisis, H&M has grown successfully and penetrated the
Romanian market in 2011. Therefore, Topshop can take a cue from this company.
Inditex has a massive success in the world due to its marketing strategy and vertically integrated
system. It is well known that Zara controls most of the steps on the supply-chain, designing,
manufacturing, and distributing its products. Also, Zara can reproduce a new clothing line in 2
weeks (design, production, distribution, sells). The Business world magazine referred to Zara in
one of their articles "Zara was a fashion imitator. It focused its attention on understanding the
fashion items that its customers wanted and then delivering them, rather than on promoting
predicted season's trends via fashion shows and similar channels of influence, which the fashion
industry traditionally used. Of course, since Stradivarius, Bershka and Pull & Bear are part of
the same family, they follow Zaras lead.
Among the best advantages that Topshop has in front of the competition is its reputation for
bringing innovation and style. While the competition copies the latest look, Topshop frequently
sets the agenda. Topshop has received numerous compliments in recent years from fashion
magazines such as 'The Face' called Topshop "a dream factory that initiates and innovates, and
creates its own fashion" and i-D said: "Can Topshop do no wrong?". In addition, the company
was nominated in 2002 as'Cool BrandLeader'. In 2001 it was named 'The most glamorous place
to shop on the High Street' from Glamour and a 'Best Stores in the World 2003' Award from The
Face. Timeout shopping awards 2002 awarded Topshop with the 'Best Womenswear Award' and
In-Style 2003 awarded the 'Best Vintage award'. Another important fact that needs to be taken
into account when discussing the advantages of Topshop is that the company is a sponsor of
14

supporting young fashion talent at a grassroots level, by sponsoring Graduate Fashion Week.
This created the unique details that set Topshop apart from the competition that limits to copy
designs.
Although Topshops designs are just as good as the competition, it lacks a key ingredient to
success: quicker response to emerging fashion trends. Its already been established that retailers
like Topshop, H&M, New Look and Zara have carved a reputation, with their ability to pre-empt
latest catwalk styles at affordable prices and with the shortest possible lead times. This is very
important to take into account since all of these companies already exist on the Romanian market
and have developed a loyal clientele.

2.4.

PEST Analysis

An important tool in assessing the external environment of the firm and in deciding on the best
entry strategy is the PEST analysis.
a) Political factors
When entering the Romanian market, Topshop has to comply with the Romanian law regarding
setting up the business, compensation for employees, taxes, etc. The political environment in the
country hasnt been very stable in the last year which led to many changes and ultimately to a
lack of consistency in the law and taxation system. As a result, people have been laid off, salaries
have been decreased, inflation has grown and consumption went down.
b) Economic factors
The most important issue here is the currency exchange rate. Due to political factors, the
currency exchange rate pounds lei or euro-lei is not stable, therefore it can change quickly.
Other costs, such as cost of maintenance, rent, employees salaries should compensate for the
currency exchange instability.
c) Social factors
Topshop is fashion that blends cutting-edge style with affordability. Therefore it is crucial that
Topshop complies with it. In fashion trend environment the company has to keep a leading role
15

because that is the characteristic the Topshop built on the social environment: fashionable and
good quality at fair prices. Not just fashion, Topshop has to consider the environment as in the
need of its consumer and reaches their needs with fashion.

d) Technologies
There are two types of technology that will affect the business which are media technology and
printing machines. For printing machines, in the process of making clothes some certain colors
and patterns needs special or more updated machine to accomplish. This way they can make sure
the quality of their product. The development of media technology will aid Topshops popularity
through advertise and their website. The website and media have to be updated to attract
customers to their brand and propagate their news events, therefore increase their exposure of
their brand to the community.

2.5.

Web site and criticism

The UK website turned out to be a success since now has a database of 120000 people with on
average 180000 unique users per week, doubling sales year-on-year. This success can be
duplicated easily to Romania.
The company has been criticized by the student campaigning network People&Planet for
allegedly using cotton picked in Uzbekistan by slaves, and for refusing to join the Ethical
Trading Initiative. Fortunately in Romania people are less interested in this kind of practices and
we are confident that this criticism wont affect the image of Topshop.

3. Market Entry Strategies

The Romanian market is also part of the European market, a highly competitive market where
the growth rate of mature European markets declines.
Many large multinational companies successfully operate on the Romanian market for a long
time now. There are many examples of European companies which enter the Romanian market

16

successfully, such as: Zara, H&M, Mango, Bershka, Pull and Bear, The Body Shop, LOccitane
and so on.
In order to find an appropriate market entry strategy we have to make an industry analysis so that
we can identify the market volume and market tendencies together with customers
characteristics and segments also focusing on the market structure and its threats.
Furthermore, we have to formulate a competitive analysis benchmarking the main business
activities focusing on Topshops products and competitors.
Analyzing the distribution channels is also a big challenge, mostly because it is extremely
difficult to estimate the profitability and the volume of the investments and predict future
negotiations with potential partners and industry experts.
Finally, the market entry strategy should contain the market entry options, the brands portfolio a
positioning and pricing analysis together with distribution and promotion channels.
Exporting is a possible entry mode strategy for Topshop as it can make goods in the UK and sells
them in Romania. This method provides an opportunity for Topshop to acquire international
experience for decreasing its risk exposure and resource commitments. But Topshop, a famous
international brand, has expanded its market in many other countries and it has already owned
enough experience and strength to undertake risks. Exporting may waste a long time for it to
entry into Romania, because it relies on local distributors and some of them have less access to
marketing and promoting international products.
Licensing is another way for Topshop to enter into Romania, one with less resource
commitments. It is attractive for small firms as it requires little capital. Topshop can easily enter
Romania quickly and fairly with easy access to market knowledge, distribution and contact with
customers. In this way, Topshop will have a less and direct control for its. To some extent, it may
enhance the stress of competition in Romanian market because of the customers option to
choose imitation, which is similar with what they want, with a lower price. We believe that
Topshops products are harder to imitate, and that there is a quality difference between their
products and fakes.

17

Franchising is a relatively safe way to penetrate a foreign market. It requires less resources for
Topshop, a local business partner that makes the arrangement in Romania, better market
positioning.
Franchising is a suitable entry strategy for Topshop in Romania.Is a road more traveled since it
has been used successfully by other retailers.
With more international brands striving for a share of consumers wallet, there is a need for
brands to create a distinctive brand identity. Exclusive branded outlets increasingly became a
marketing tool through which the brands could not only showcase a complete product range but
also create the full brand experience.
Also, the habits of Romanians are a tool that works to the advantage of the company. By having
the store in a mall or shopping center, Topshop is visible and gains the confidence of the
consumer. In addition, mall, stores, shopping centers are opened from Monday to Sunday from
10am to 10pm in contrast to Western countries. Therefore Topshop gets more exposure. A
valuable strategy would be to rent a space down town where only Topshop is located to create
the idea of uniqueness, its seen as more valuable and people are more likely to buy. This
marketing technique can raise more money.
A joint venture is a new company which is created by Topshop with the partners of its choice. It
differs from licensing as Topshop can take a managerial role and participate in operations and
thus control its product line. Partners will share the risks and costs of investment. Other benefits
that come with the joint venture can bring greater familiarity with the local environment,
especially for the cultural sphere of the Romanian market. By creating a joint venture with a
local partner, Topshop may benefit from government support.

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4. Definition of strategy
In the last two or three years, the fashion retail market in Romania has increased steadily by 1015% annually as revenues and budgets available to such purchases increased. According to
estimates, the local fashion retail market level returned in 2009 to the level it had in 2006, 1.6
billion euro.2 In this favorable context, the British multinational retailer wants to expand on Eastern
European market. A step in this direction would be by entering the Romanian market.

4.1. Locations

Topshop comes into force into the fashion retail market in Romania. The British retailer plans to
open 4 new locations in Bucharest, by the end of 2013. The proper locations for expansion would
be Bucuresti Mall, AFI Cotroceni, Baneasa Shopping Center and Unirea Shopping Center.
At the beginning of June 2013, Topshop will open a 2800 m2 store in Bucuresti Mall. This is
going to be the biggest Topshop store in Bucharest and it will cover 2 floors. By the end of the
summer, the next two stores will open in AFI Cotroceni and in Baneasa Shopping Center. Both
will have a surface of 2400 m2. The last store will open its gates for customers by the end of the
year, in December, in Unirea Shopping Center. This last location will have a surface of 2500 m2,
and it will also cover 2 floors.
According to the expansion model followed in other countries from Central and Eastern Europe,
Topshop would open stores next year in major provincial cities with over 300000 inhabitants Iasi, Timisoara, Cluj-Napoca and Brasov, after which they target certain cities with 150000
inhabitants.

http://www.wall-street.ro/articol/Companii/93584/H-M-recruteaza-Ce-angajati-cauta-in-Romania.html

19

4.2. Suppliers
Regarding the suppliers, entering Romanian market shouldnt be that much of a challenge as you
may well keep your traditional suppliers for what the apparel and accessories are concerned. We
know that you dont use to have your own factories inside a country to manufacture your
products, instead you have more than 500 independent suppliers mainly in Europe and Asia
which provide all the raw materials, apparel, footwear and accessories you need to satisfy the
customers in Romania. The production offices will be responsible for placing the order with the
right supplier and for items being produced at the right price, making sure that they are of good
quality and delivered at the right time. They also audit that production takes place under good
working conditions. The production offices will perform extensive safety and quality testing,
including checks for shrinkage, twisting and colourfastness, as well as ensuring that the chemical
requirements have been met.

4.3. Employees
Romania is a very good country in terms of finding and developing employees, especially young
people eager to find a career path in an internationally successful company like yours.
Romanians are usually very much attracted by international apparel brands, are very fashionable
and many of them have good knowledge of foreign languages, especially English but also Latin
languages, German or even Norwegian. Romanian employees also prove to be most of the time
very loyal with the employing company and willing to develop their skills and get involved in
plenty of training opportunities as long as they have a chance. Despite all these, the wages they
expect to receive and the average wage gained in Romania for a job in this field is very low. An
average employee of Topshop in Romania will not earn more than 400 Euro gross. What is also
good to know is that every employee in Romania has a testing period of 3 months. In that period
the employee can fire him at any time without having any financial liabilities. Also the
legislation allows 21 days of holiday for an average employee.

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In the first one or two years we are estimating that a total of 100-150 employees would be
needed to manage your activities and after 3 years since opening, we estimate that Topshop
Romania will count for around 350 employees. We can guarantee a very successful recruiting
process in jobs like Cash Office, Cash Office Manager, Sales Advisor, Department Manager,
Designers, Customer Service Agents, Visual Merchandiser, Girls Wear Print Designer, Store
Managers, Fashion Design Assistant, Visual Key Holder, District Visual Manager and so on.
Topshop employees need to differentiate themselves from the crowd. They have to be people
who enjoy working in teams, very dedicated, multi-skilled, and can handle stress. We are looking
for people with positive thinking with an open and friendly attitude towards customers,
colleagues and their workplace.

4.4. Logistics

Every stage in the logistic chain will be controlled by Topshop acting as importer and
wholesaler, as well as a retailer. Continuous IT development will provide support to Topshop
logistics. While the stock management will be primarily handled within the Topshop
organization, transport is contracted to third parties. A large part of the flow of goods will be
routed from production sites via a transit terminal in Germany. We plan that your company will
need a distribution center in Romania, as well. Upon arrival, goods will be inspected and
allocated either in a store or in the centralized stock room, referred to as Call off warehouse
The role of the warehouse will be to replenish item levels in stores according to selling trends.
One of the small inconveniences in Romania is that the movements from the distribution center
to the stores will be a little slower and more difficult to plan and accomplish the schedule with
great accuracy as the country does barely have any highways and the European and national
roads are quite slow and always over-crowded. Anyway, this issue should not count that much
for the overall financial performance of the company, since the distances and the total amount of
time spent on the road will not be so important. When thinking where to choose to implant the
distribution center, we thought about two options. As most of the Romanias GDP is
concentrated firstly in Bucharest and secondly in the region named Transylvania, we thought
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about placing the center either next to Bucharest or near Alba Iulia, in the heart of Transylvania,
near a very important crossroad, Sebes. After analyzing the cost of the each option and the nature
of the workforce in each region, we suggest to place the distribution center near Alba Iulia. The
workforce is cheaper and better qualified, more professional, serious and much less risk to be
involved in the recruiting process. Moreover, the local authorities have a very good regime for
building this king of businesses. The price for building the center will be approximately two
thirds of the price required to build next to Bucharest, including all the mandatory fees and taxes.

4.5. Contracts to Establish

There will be a lot of contracts to establish when entering the Romanian Market, and we must be
positive that we dont underestimate this step as it may cost a lot of market share, although the
most important aspect when comes to sell clothes in Romania is location, location, location.
Anyway, Romanians love wasting time and watching TV and dream about themselves wearing
all kind of fancy dresses at very spectacular events. Most of them remain loyal to some national
channels like TVR, Antena 1, ProTv but the youngsters like also international channels like
MTV, HBO, FashionTv, and other channels that may be suitable for fashion advertising.
Romanians also have a hobbit in listening to radio stations when driving the car.
So, although our competitors like H&M, Zara dont use advertising that much, we suggest to
establish some contracts with the three or four of the above mentioned TV channels and also
with national radio stations like Pro Fm, Radio Guerrila and Kiss Fm, a radio station which plays
tremendously annoying music, but gathers around many ears. It is also very popular in Romania
to establish contracts with the public transportation companies so we can have some ads on the
busses, trams, trolleys especially in cities like Cluj-Napoca, Timisoara and Iasi where many
students travel using those and their minds will go fancy when seeing those images.

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6. Bibliography

1. http://www.topshop.com/webapp/wcs/stores/servlet/TopCategoriesDisplay?storeId=12556&catal
ogId=33057
2. http://en.wikipedia.org/wiki/Topshop
3. http://en.wikipedia.org/wiki/Arcadia_Group
4. http://www.arcadiagroup.co.uk/
5. http://la.racked.com/archives/2012/10/03/everything_to_know_about_topshops_now_open_la_po
pup.php
6. http://www.news.com.au/lifestyle/fashion-beauty/topshops-top-looks-via-instagram/storyfnet01u7-1226487682389
7. http://www.wall-street.ro/top/Companii/101448/Cele-mai-importante-branduri-care-au-intrat-inRomania-in-T1.html
8. http://www.wall-street.ro/articol/Companii/93584/H-M-recruteaza-Ce-angajati-cauta-inRomania.html
9. http://www.9am.ro/stiri-revista-presei/Business/Imobiliare/143271/Topul-retailerilor-de-fashionin-anul-crizei.html
10. http://www.brandrepublic.com/News/474559/Superbrands-case-studies-Topshop/

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