Asos has announced a joint venture with US department store chain Nordstrom, marking its first foray into bricks-and-mortar. Retail Week speaks with boss Nick Beighton about why he thinks Nordstrom is the right partner for its new brands.
Five months after beating out other retailers such as Next and Boohoo to take the jewel in Arcadia’s crown, Topshop, along with Topman, Miss Selfridge and HIIT, Asos is now set to relaunch the brands in the US with a new model.
Partnering with department store retailer Nordstrom, which previously sold the Arcadia brands on a wholesale basis, the two companies will join forces to create a new business model and bring London fashion to American 20-somethings.
As part of the deal, Nordstrom has taken a minority stake in the four brands, whilst also being given access to Asos’ own brands.
“When you both invest, you’re both wedded to the outcome so it’s more than just a wholesale trading relationship,” explains Asos chief executive Nick Beighton, who believes the joint venture will return Topshop to former glories in the American market.
Lack of backing was behind 2019’s downfall
Beighton says the collapse of Topshop and Topman in the US in 2019 wasn’t because the brands didn’t resonate with the customers, but because of financial pressures. The two brands combined had a $1bn turnover (£0.72bn) in the 2019 financial year in the US, but was forced to close its 11 stores after backer LGP pulled the plug.
With Topshop having since relaunched as a pureplay brand on the retailer’s website in the UK, Asos has now turned its hand to creating a different multichannel experience for Topshop customers in the US.
An edit of the four former-Arcadia brands will appear alongside the pureplay retailers’ Asos Design, Collusion and AsYou ranges in Nordstrom stores as part of a “London fashion floor” launching towards the end of the financial year.
“Asos brands have never been in store before and now they will be”
“Nordstrom will get Topshop, Topman, Miss Selfridge in North America with exclusive store access,” he explains. “Those brands will go into a handful of their stores to start off with. At the same time, we’re giving an edit of Asos Design, Collusion and AsYou, because we know they’re super hot brands in North America already, and will be available in Nordstrom and on nordstrom.com.
“This will be a first between the physical and the digital - Asos brands have never been in store before and now they will be.”
While Beighton hopes the venture will drive awareness of Asos and its brands amongst younger American consumers, Retail Week research director Lisa Byfield-Green says that the partnership also makes sense for Nordstrom.
“Along with the department store sector as a whole, Nordstrom needs to innovate and reinvent itself,” she says. “Last year’s pandemic was difficult for the retailer, but its latest results for the first quarter of 2021 showed that net sales increased by 44% year-on-year.
“Part of its reinvention strategy involves a stronger focus on online, D2C and curbside pick-up. At the same time Nordstrom is aiming to appeal to a younger demographic and this is where Topshop fits in. The retailer has already worked with younger brands, including Glossier, and made-to-measure young menswear company Indochina, which has opened 21 shop-in-shops.”
The new business model will allow Asos to leverage Nordstrom’s data, distribution centres, pick up and drop off points as well as reverse dropshipping where consumers will be able to order anything to be delivered that is not available in store.
Asos could become a high street presence
When asked whether learnings from the Nordstrom joint venture could lead Asos to explore a physical store presence in the UK, Beighton says it’s “not beyond the wit of man”.
“It’s too early for us to talk about, but we’re building a model, we will finesse the model, and it will be a combined digital experience,” he adds.
“If this model works, then we could roll it out to new markets where there’s a strong Asos presence like Europe and the UK, but we’ve made the decision to focus on North America for now.”
The Nordstrom edit will first launch in “half a dozen” department stores including Miami, LA and Manhattan, as well as online, with the option to roll it out to more of the 350 stores in the USA and Canada if all goes well
The joint venture marks a historic moment for Asos and its new stable of brands. While the pureplay retailer and its new stable of brands look set for a successful tie-up in the US, the partnership could also give indications for its future bricks-and-mortar plans in markets closer to home.
- Get the latest fashion news and analysis straight to your inbox – sign up for our weekly newsletter
No comments yet