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US apparel retailers gung-ho on EU markets

02
Jul '12
At a time when consumer sentiment is at its nadir in Europe, mainly due to the ongoing debt crisis, few well-known high-end US clothing retail firms are choosing Europe as the preferred destination for their expansion plans.
 
In order to offset the declining demand in China and the US, American garment retailers are betting on Europe as a part of their geographical diversification strategy, despite the ongoing eurozone debt crisis and low growth rates in the EU. 
 
Europe, being a mature market, is prone to lesser risk compared to emerging economies of Brazil, Russia, India or South Africa, and that is the reason for luxury apparel retailers to postpone their foray into emerging countries, and instead expand in Europe, according to Jones.
 
Jones, which owns brands like Anne Klein, has expanded in Europe in the last two years, and its international sales now account for about 22 percent of the company’s total sales, compared to a mere six percent sales two years ago.
 
Jones reasoning is that Europe has vast number of consumers possessing huge spending power, and that fact does not change even though the region is going through a period of economic turmoil. 
 
Jones’ decision to open more outlets in Europe also arose partly from the fact that every year millions of Europeans visit the US specially to buy US-made products.
 
Like Jones, apparel brand Theory has also announced plans to open outlets in France and the UK. Explaining the rationale behind its decision, Theory said the company is looking at long-term prospects and Paris and London will remain key cities for growth, irrespective of short-term fluctuations in their local economies.
 
Another US apparel retailer Tory Burch opened its flagship outlets in London and Rome this year and is planning to open stores in Turkey and Germany in 2013.
 

Fibre2fashion News Desk - India


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