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East vs West?

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It seems that in the last year, there has been a migration East for fashion brands looking to expand into the international market. Those brands without a presence in the booming Chinese market are conspicuous in their absence; at the end of last month Louis Vuitton added to its portfolio with a store launch in Shanghai.

A decadent launch with all the trimmings, the event was attended by the fashion elite hopping on board an Oriental Express train to the destination store to watch a fashion show on their arrival.

While this is thanks to a flourishing economy in the East, smaller brands should exercise caution before expanding internationally.

Tristan Rogers, CEO of Concrete Platform, a web–based brand management platform which has enabled many retailers including Levis’, Tesco, Clarks and Gap to expand internationally and at a measurable success rate, comments: “M&S was our first customer and was serious about international for years, but I think it is always amusing or tragic perhaps that it got such a drubbing in the press several years ago for pulling out of Paris.

“I think that was largely what people believed to be its international foray.

“Back in 2005, it was already in 28 countries and now that has taken it to 46 countries.

“It is a significant part of its profit and becoming integrated into its strategy.”

However, Rogers believes Managing Executives of some companies are naïve and do not want to face the hurdles involved in uprooting existing merchants to be translated into another market.

Those operating in unfamiliar markets can easily run into trouble, as they are not prepared to do the homework, Rogers warned.

“Executive members don’t know really where the hotspots are and franchise partners and don’t know how to make something operationally work,” he said.

“They are used to a parochial approach, getting into their chauffeur driven car to get to a press opportunity.

“It is an altogether different thing to fly to Russia or go to Singapore where the growth is. Brands travel, retailers don’t.

“I think to a large degree, a lot of retailers in the UK have that shopkeeper mentality of ‘open the doors and they will come’.“

Rogers’ own clients who have adopted the Concrete Platform approach have cracked an Eastern marketplace by being well established in their homeland before they decided to launch elsewhere.

He explained: “I certainly heard no bad things about M&S and Gap in China, its offer and approach has worked because their proposition has worked.

“They are experienced people. The international retail scene is a really small group of professionals who know their onions.”

With the London 2012 Olympics currently in town, many retailers have seen the capital as ripe for expanding a brand out of the home market.

Last week, many fashion stores battled to be the best pop-up shop with US brand Opening Ceremony’s temporary store launching in Covent Garden while a Chanel beauty outlet opened in the heart of London’s retail district.

Opening Ceremony is a luxury retailer planning to take up residence in Covent Garden in the autumn with a permanent bricks and mortar store.

This strategy will not only target UK shoppers but will showcase its brand on a global stage as there will be a receptive overseas audience in London over the next two weeks.

Rag & Bone is another US giant which has come over to the UK and also launched a Kate Moss fronted campaign hoping to attract international shoppers prepared to spend on designer clothing.

According to traveller services firm Global Blue, Chinese shoppers specifically book holidays in London for the sole purpose of shopping in the capital.

Richard Brown, Vice President of Global Blue services in the UK, told Retail Gazette: “They have a real desire compared to any other activity abroad to spend money.

“Looking at an average transaction per individual shop of over £700, not just for a total visit to the UK, but every shop they go into they will spend £700.

“It is significantly more than the UK shopper as it is four times the amount they will spend in the same merchant.“

Chinese company Bosideng launched its menswear brand on South Molton Street last week.

Wth Nick Holland, famous for creating Oasis front man’s Liam Gallagher’s line Pretty Green on the design team, Bosideng has definitely promoted itself under the premise of the ‘cool’ factor.

Jason Denmark, Head of Retail Operations for Bosideng and the man who has effectively given birth to the brand in the UK felt that hiring Holland would help to secure a long-term place in the London fashion scene.

He told Retail Gazette: “We needed to make sure we cultivated and got on board a design team that could ensure the seamless and continuity into a market that would be readily accepted.

“The association with Pretty Green was quite simple. Nick Holland one of my favourite designers.

“I had looked at Holland esquire and how he made an apparel range for Pretty Green for Liam Gallagher and how well it had been received within the marketplace.

“He was the main man I wanted to bring in for Bosideng.”

Further international branches in the West have not been ruled out for a company with high hopes for its future in London which has already had 50,000 hits from a viral marketing campaign.

Denmark added: “London is a fantastic platform for us as we are not only a Chinese business but we work with the best young UK designers.The actual product is not just for a London audience.

“It is a brand that can travel into international waters, particularly into Western Europe.”

Despite this confidence that the UK will be the height of retail commerce over the Olympic period, Rogers warns that companies should not gamble on the tills ringing much more than usual in an economy in the throes of a recession.

It is only the false glittering of gold and a retailer is better looking East if it wants its business to seriously thrive.

Rogers believes Rag & Bone’s move to expand its store portfolio to Korea is a wise one and argues that the Olympics will not provide the boost that the UK retail industry is hoping for.

He commented: “If the Olympics gives any uplift it will be a miracle.

“First of all it is only here for two weeks, secondly if you go to the Olympics how long are you here for? How much are you going to buy and spend shopping?

“If people are skint they are skint. They are not going to spend money they haven’t got.

“I think given the choice of Korea and the UK, I’d probably go for Korea.

Rogers went further, claiming that Britain doesn’t have a strong enough market to appeal to foreign investors.

“I don’t understand why a US brand would bother with the UK at the moment,” he said.

“I think it is ignorant as the UK high street is dissimated at the moment.

“It is far cheaper and more immediately profitable to move into emerging markets,” he concluded.

Published on Friday 03 August by Editorial Assistant

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