Last week, a report by property agent CBRE showed that London has become the most popular city in the world for international retailers seeking to expand into new markets, paving the way for these companies to grow in other areas of the UK. Now, it has emerged that yet another US retailer is set to move into the British market, with American Eagle Outfitters preparing to open a portfolio of stores in London and the South East.
The retailer has already filed documents at Companies House in order to create a subsidiary, known as American Eagle Outfitters UK Limited, which will in turn allow it to open stores throughout the country. Already, talks are being held with Westfield regarding a lease of retail units in both its Stratford City and west London shopping centres, and the retailer has also expressed an interest in taking up space at the hugely popular Bluewater shopping centre in Kent.
American Eagle is one of the United States’ most popular retailers, with more than 1,000 stores nationwide bringing its affordable fashion range to a wealth of consumers aged between 15 and 25. Should this venture into the UK market prove successful, it will be yet another competitor in the tough high street market, taking on domestic rivals such as Topshop and River Island along with its US contemporaries Urban Outfitters, J Crew and Forever 21.
While its success in the US may indicate that American Eagle will receive a warm welcome when it reaches British shores, this is far from guaranteed. Rival chain Forever 21 last year suffered a £66.5 million pre-tax loss in the UK as, although revenues grew from £23 million to £37.1 million due to a plethora of new store openings, a £44.5 million writedown on the value of lease acquisitions and lease improvements in the year to the 28th of February 2013 caused significant damage to its financial prospects in the country.
The first year in the UK, then, can prove tempestuous for overseas retailers, particularly those coming from a relatively affluent market. In addition, as American Eagle is focusing primarily on the heavily crowded London market, it may find that competition from both high end designer brands and low cost budget chains will impact upon store footfall and cause sales to stagnate until a loyal customer base can be established.
London is certainly the city of the moment in terms of international retailing, and many firms within the industry will fear that a lack of presence in the UK capital may render them obsolete with a larger worldwide consumer base. However, with commercial property prices rising and a plethora of international brands fighting for space, American Eagle may find Britain a tougher nut to crack than its home market.
Previous Post
Hiscox names Contractor for Flagship York Office
