The British retailer predicts its overseas sales will overtake the UK this year as it prepares to open more stores in Asia and the Middle East.
Cath Kidston, the quintessentially English fashion and homewares retailer, expects its overseas sales to overtake the UK within the next year.
Cath Kidston generates 40% of its sales overseas at present and chief executive Kenny Wilson told Retail Week: “We’re about a year away from making more money outside the UK.”
He said that reflected “the broad appeal of the Cath Kidston brand to consumers around the world”. The retailer reached the milestone of opening its 100th overseas store on Monday in Seoul, South Korea.
It plans 35 to 40 new stores per year, with a focus on its existing overseas markets in Asia including China, Japan, Korea, Malaysia, Singapore, Taiwan and Thailand.
Cath Kidston, famous for its kitsch prints, will also look at new markets including the Philippines and Dubai, where it plans to open its first store in the autumn. Wilson said Cath Kidston could have “two or three” in the Middle East by the end of the year.
Wilson said China, where it operates four stores, represents a great opportunity. He said within 10 years Cath Kidston is likely to have “quite a lot” of stores in the country.
Shoppers in Asia are drawn to the “Britishness” of Cath Kidston, as well as its “femininity, cheerfulness, colourful nature, and great new products”, Wilson said. The retailer has opened an office in Hong Kong, reflecting the demand across the continent.
The aggressive expansion plans came as Cath Kidston reported group sales increased 10% to £116m in the year to March 30, when overseas revenues jumped 37% to £46m.
EBITDA increased by 19% to £25m while it made a profit on ordinary activities before taxation and exceptionals of £2.1m compared with a loss of £600,000 last year.
Cath Kidston opened 42 branches in the year, including establishing its first presence on the Continent, with concessions in Galeries Lafayette in France. Since year end it has also opened in El Corte Inglés in Spain.
The retailer plans to open five stores in the UK this year. But Wilson cautioned: “We don’t want to oversaturate any market.” Cath Kidston operates 66 branches in the UK, the majority of which are standalone stores.
Cath Kidston opened its 7,000 sq ft flagship in London’s Piccadilly in December. Wilson described its performance so far as “stellar” and said it was turning over “twice what we expected”.
Cath Kidston hired UBS earlier this year to explore strategic options. Wilson said the process is “ongoing” and that a “number of parties” had expressed interest in buying it. He said: “It’s very important to find the right partner for the next phase of our development.”