If you’d said 10 years ago that Sir Philip Green would be talking in Retail Week about opening Topshop stores in China, India or Brazil (page 18), no one would have believed you. But the remarkable spread of nationalities represented at this week’s World Retail Congress in Barcelona showed just what a global business this has become.
The fashionability of international expansion for UK retailers has become slightly tarnished over the past year, as retailers such as DSGi and Kingfisher have laboured in some of their international outposts. Reports of Tesco’s difficult birth in the US prove that no one is immune to experiencing challenges in new markets.
But does that mean it’s wrong? No way. For every UniEuro in Italy, there is an Elkjøp in Scandinavia, where DSGi has been successful. Tesco may be finding the US tough, but entering the world’s biggest market on the scale that it has done was always going to be hard – a fairer assessment can be made after a year.
But the opportunity isn’t just for big brands. On a relative scale, it is probably greater for smaller retailers – particularly in fashion – with a strong brand and distinctive product offer that can provide something different in new markets.
We’re in for the long haul in the UK market. And that makes it even more true that the inevitable challenges that come with international expansion shouldn’t be a deterrent.
Retailers have paid their dues
Some people got excited this week when a couple of struggling retailers asked to pay their rents monthly rather than quarterly. But why? Asking to pay rent monthly has traditionally been a sign that a retailer is struggling, but there’s no logical reason for that to be the case.
After all, most suppliers of product to retailers are now being told to expect payment 90 or 120 days in arrears. So why should landlords be in the uniquely privileged position of being paid 90 days in advance?
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