Tesco has created a new franchise model to enter Saudi Arabia as it looks to turn its F&F fashion label into a major global brand.
Tesco has partnered with retailer Fawaz Abdulaziz Al Hokair & Co (SJSC), which operates 1,300 stores under 80 brands, to open 19 stores in the Middle Eastern country.
F&F hopes to extend into a number of further countries using the same model but is yet to confirm locations. Tesco already operates F&F stores in 11 countries across central Europe, Turkey and Asia.
The franchising model will see Tesco working with local partners to open standalone stores within shopping malls and units within department stores and hypermarkets.
Tesco is targeting a leading clothing market share in Saudi Arabia, a position it holds in the Czech Republic, Hungary and Slovakia. The Saudi stores will be the first F&F shops outside markets in which Tesco already operates.
F&F International chief executive Jason Tarry said: “The franchise model is a natural extension of the work we have been doing to turn F&F into a truly global fashion brand.
“We have in a very short time created a market leading fashion brand in Central Europe, now worth over £400m. Now we have the opportunity to grow our brand further, in markets where Tesco does not have a presence.
“Al Hokair is an excellent partner for F&F. It offers local expertise, knowledge and franchise experience that will really make a difference for local customers.”
Tesco is increasing the number of venture brands – own label products under separate brand names – in its UK stores and F&F is its “most advanced” brand overseas.
SJSC chief executive Simon Marshall said: “F&F will augment and enhance our portfolio of international brands and has the potential to become one of the leading fashion brands in Saudi Arabia.”
The first F&F franchise is planned to open later this year. F&F designs its clothing from its headquarters in Welwyn.
Tristan Rogers, chief executive of ConcretePlatform.com which supplies software to international retailers, said: “F&F’s retail concept is strong and it has the might of Tesco behind its sourcing and logistics. And now Tesco is embracing franchising, arguably completing its skill set as a global apparel brand to be reckoned with.
“With Wal-Mart’s George brand already out of the blocks with it’s own franchise initiative, there will now be two powerhouses going for land grab. If I were at the value end of the clothing market, I’d be worried.”