As economic recovery intensifies a growing number of British retailers are seeking opportunities overseas in a bid to lift revenues and raise profits whilst consumer confidence is high. Whilst much of this expansion is taking place in markets such as the Middle East, China and India, the USA remains a key target for fashion retailers keen to follow the likes of Topshop into the lucrative market.
Yet whilst many have gambled with going it alone in the USA, more are seeing the opportunities a franchise partner or joint retailer with an existing customer base has to offer. This is perhaps why British brand Hobbs has chosen to open five concessionary branches within American powerhouse Bloomingdale’s stores across the country.
The branches will be located in: Hackensack, New Jersey; McLean, Virginia; Boston, Massachusetts and King of Prussia, Pennsylvania, as well as within Bloomingdale’s iconic 59th Street New York store. Each will epitomise the upmarket brand’s heritage, with luxury fabrics, top of the range daywear and modern tailoring – yet will differ from the British collection slightly in that each piece will be an exclusive edit catered towards the fashion tastes of US consumers.
The plans for the joint venture were drawn up before Hobbs’ challenging Christmas sales period, which for the large part saw consumers react with apathy at best to the turnaround plan aiming to modernise the brand’s offering. As a result, owner 3i was forced to write 40 per cent off the value of the brand and made the decision to overhaul the management team, leading to the appointment of former New Look boss Phil Wrigley as chairman.
Industry experts believe, for the large part, that Hobbs’ problems centred around its focus on international expansion at the cost of addressing the needs of its core UK customers. Mr Wrigley, however, insists that the United States venture is not a risk as the firm launched a US website last year which has seen “a very good reaction to key products.”
He continues; “Everybody makes mistakes and we have all had our fair share. It all comes down to products and people – it is about being clear about what didn’t work and sustaining it; we will be reasserting our heritage on fabrics.
“Customers are prepared to pay above average prices but we can’t be too greedy on what we charge them.”
Hobbs CEO, Nicky Dulieu, believes that the tie-in with Bloomingdale’s brings with it a “significant growth potential”, as it will take the number of Hobbs outlets to more than 140 worldwide. This includes franchise stores in Sweden and the United Arab Emirates, which have so far seen a strong positive reaction from domestic consumers.
Bloomingdale’s stores already play host to a number of British brands including Reiss, All Saints and Lipsy – hopefully Hobbs’ entry into this prestigious company will help the retailer to solve its woes and get back on track with consumers both overseas and in the UK.
Do you think retailers struggling to attract consumers within the UK are right to pin their hopes on international expansion?
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