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American retailers try their luck again in Europe

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Stephanie CliffordLiz Alderman Paris
Last Updated : Jan 20 2013 | 10:13 PM IST

On a recent Sunday afternoon, the Champs-Élysées was packed with people enjoying this city’s most famous boulevard — window shopping, sipping wine at sidewalk cafes and strolling toward the river with ice cream cones.

Then there were the 150 people waiting to get into an American retail chain store. And that was one of the shortest lines since the store, Abercrombie & Fitch, opened here last month.

Abercrombie is the latest in a stampede of American retailers opening in Europe. The expansion is based on a major shift in how young Europeans think about American fashion. In countries where protests against globalisation were common a decade ago, American retailers are being welcomed by screaming fans and their credit cards.

“Young people here don’t think badly about America — we’re American in our heads,” said Mathilde Feuille, 17, who waited about four and a half hours the day the Abercrombie store first opened. “We watch all the US television series: ‘Gossip Girl,’ ‘Glee,’ ‘Vampire Diaries’”.

Across Europe, tailored sweatpants and frayed oxfords — American casual — are replacing Chanel jackets and knotted scarves as the clothes many teenagers aspire to own, according to fashion and retail analysts. And while the European stores account for only a small percentage of sales, they tend to bring in higher profits, as discounting is not as expected, and the overall price of garments tends to be higher in Europe.

Banana Republic will open its first French store later this year. Gap opened last year in Milan, and will open this year in Rome. Tommy Hilfiger and Michael Kors have built gigantic Paris flagship stores, while Tory Burch just opened its first Rome store. Even Victoria’s Secret is making the plunge, opening its first shop outside North America next year in London.

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“The internet helps break down some of the language barriers, and makes brands a little bit more transportable across borders,” said John D Morris, a retail analyst with BMO Capital Markets.

This is not the first time Americans have tried to master European retailing. In the mid-1990s, American brands like Gap and Talbots expanded into Europe. But, said John Long, a retail strategist at the consulting firm Kurt Salmon, they found rent was too high, regulations were too onerous and the demand just wasn’t there. By the early 2000s, Gap had closed its German stores and Talbots got out of Europe altogether.

Now, many retailers believe they have too many stores in the United States, but still want to increase sales, so opening European locations is an obvious solution, Morris said. Europe is a relatively easy place to go — Asia, while also an attractive market, generally requires different store formats, sizes and designs, while American gear can typically be sold unaltered in Europe.

And the fierce loyalty to European brands no longer exists, especially among the newest generation of consumers.

“They are becoming more cosmopolitan because they are citizens of the world, living contemporary lives that are in tandem and no longer as a continuous fight among cultures,” said Armando Branchini, the president of InterCorporate, a Milan-based luxury goods and retail consultancy, of young Europeans.

Also, the long absence of many American brands has helped increase their allure, said Jean-Noël Kapferer, a professor at the HEC School of Management in Paris. It has been a sign of status, he said, that Europeans had to go to New York to shop at Abercrombie or Tommy Hilfiger.

Still, almost all of the American clothing can be ordered online. So retailers are going to great lengths to attract shoppers to their new European stores.

In early May, before Abercrombie’s store opened here, the Columbus, Ohio-based company flew in more than 100 male models to parade shirtless, jeans slung just above the groin, in front of the 31,000-square-foot store. While teenagers screamed, older, more soigné Parisians looked on with an air of disdain.

©2011 The New York Times News Service

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First Published: Jun 17 2011 | 12:20 AM IST

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