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American Image Abroad: Putting Politics Aside, U.S. Brands Still Strong

While there may be a fair amount of anti-Bush and anti-American sentiment in Europe, it’s clearly not stopping consumers from buying U.S. brands.

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LONDON — Just what does it take for European consumers to forgo an iPod, a bottle of Aveda shampoo, a pair of Gap stretch denims or a Polo Ralph Lauren fragrance? Whatever it is, it’s certainly not U.S. politics.

While there may be a lot of free-floating anti-Bush and anti-American sentiment in the U.K. and Continental Europe right now, it’s clearly not stopping consumers from buying U.S. brands.

Indeed, the industry observers, U.S. fashion brand executives and consumers on the streets of London interviewed for this story in the days before and just after President Bush’s reelection overwhelmingly agreed that politics and fashion rarely mix.

“There is quite a bit of underlying anti-American feeling and mistrust here, but it doesn’t cross over to the brands. Europeans are just not that crude,” said Stephen Cheliotis, brand liaison director for Superbrands, a London-based independent branding consultant.

Indeed, in the U.K., op-ed writers appear to be resigned to another four years of Bush.

“I suspect that many anti-Americans inwardly rejoice in an election result that will enable them to go on believing that the Americans are all trigger-happy, gas-guzzling religious maniacs,” wrote A.N. Wilson in The Evening Standard on Friday. And George Kerevan, writing in The Scotsman last week, said, “Anti-Americans should be aware of getting what they wish for — living without the Americans may prove worse than living with them. Like it or lump it, a Bush White House is now a fact of life. But if Scotland calms down a minute, we might discover that his America is a far less alien place than we imagine.” (The mainstream view in Scotland is anti-Bush.)

Still, Cheliotis said, “People are savvy enough to know the difference between the corporation and the country, and they are more loyal to brand names than anything else.”

Allyson Stewart-Allen, a director of International Marketing Partners Ltd., a marketing consulting firm based here, said she believes anti-American sentiment has peaked in Europe. “It’s already reached its zenith. People are getting used to four more years of Bush and a unilateral power,” she said in a telephone interview.

This story first appeared in the November 9, 2004 issue of WWD.  Subscribe Today.

Stewart-Allen added that U.S. brands and companies will increasingly have to become more local-minded if they want to survive in Europe.

“That means hiring local staff, using local store formats and pricing in the country’s currency. As a marketing platform, being American is no longer unique — or covetable. Companies and brands have to go beyond being American.”

For some consumers, it’s a question of practicality. “If you didn’t buy U.S. products, that would be such a huge chunk of the market that you’d have to avoid,” said Stephanie Akinbulumo, a student here at Central Saint Martin’s College of Art and Design. “Whatever the politics in the U.S. might be, I’ll still go to Gap.”

George Wallace, chief executive of consultant Management Horizons Europe, for one, would agree.

“How many consumers out there are going to say ‘Gee, I love that leather belt — too bad it’s from an American brand?’” he asked with a laugh. “The substance of a product and the lifestyle image it projects is far more important for the consumer than geopolitical issues. I think the people who aren’t buying American right now wouldn’t buy it anyway — for a variety of other reasons.”

Grace Banks, 19, a student in London, is a case in point. “U.S. politics wouldn’t make any difference to me buying U.S. brands, even though I don’t like either Bush or Kerry.”

The brands themselves said politics isn’t denting their image — or their balance sheets — in the U.K. or on the Continent.

Polo Ralph Lauren, which opened its first Italian flagship on Milan’s Via Montenapoleone in September, is an example. According to Nancy Murray, senior vice president of public relations and financial communications at Polo, the 16,000-square-foot store is having a “halo effect” across Europe.

“Since the Milan store opened, we’ve been seeing higher wholesale and retail sales for our women’s business in markets including Germany, France, Spain and the U.K.,” Murray related. “In Milan, we’re getting mostly local customers, and we’re so excited about their reaction — we haven’t been able to keep the turquoise jewel box filled,” she said, referring to the store’s showcase for jewelry.

Murray said Polo Ralph Lauren isn’t representative of the politics or geography of America, but rather the American spirit. “It’s about the American value system, and America as a place where you can take big ideas and see them fulfilled.”

Polo Ralph Lauren’s latest figures back up Murray’s point of view. The company said in its second-quarter statement last week that wholesale revenue rose 49.5 percent to $502.6 million, driven in part by growth in the European business. Retail sales grew 7.4 percent to $319 million, fueled primarily by stores in the U.S. and Europe.

Polo isn’t the only big U.S. brand that’s growing despite the current anti-American climate.

In August, Urban Outfitters opened its third London unit, on Oxford Street, and the company has major expansion plans for the U.K. and continental Europe. In March, a 12,000-square-foot, two-story unit is slated for Birmingham.

After Birmingham, the plan is to push into the rest of Europe and open a unit in either Amsterdam or Copenhagen next year. The goal is to have a total of 10 stores in the U.K. and Ireland over the next four years, and another 30 in continental Europe over the next eight to 10 years.

Asked if the London stores had been affected by anti-U.S. sentiment, Martin Parker, managing director of Urban Outfitters U.K., said, “Not at all. There’s been no feedback about that at all.”

Further, two more U.S. brands will be setting up shop in Europe: Arrow and Haggar. BMB Group, the Leeds-based men’s and women’s clothing company, acquired the licenses for Arrow and Haggar this year and plans to develop those brands through a mix of freestanding stores, concessions and wholesale accounts in Europe and the U.K. BMB aims to take Haggar into northern Europe and to the Baltic states in particular. Arrow’s efforts will be focused more on the U.K.

“Culturally, Europeans respond well to American brands because of the lifestyle aspect and the heritage the brands carry,” said a BMB spokesman. “There’s probably a gap between politics and the influences the consumer is open to. In Europe, we still drink in American coffee bars and watch American movies.”

While not all U.S. brands can boast stellar success in Europe, it’s not necessarily due to politics. Gap has had to re-think its strategy in certain European markets, but it’s still fully committed to growth abroad.

In September, the San Francisco-based retailer pulled out of Germany. “We had been there for 10 years, but we weren’t relevant to that market,” said Calvin Hollinger, vice president of information technology at Gap Inc., during a retail technology presentation here last month. “So we cut our losses. It was 10 stores — and less than 1 percent of revenue.” He added that at some point, Gap plans to go into China, and that Old Navy might open shops in Japan, France and the U.K.

Rita Clifton, chairman of Interbrand, a London-based international brand consultancy, isn’t surprised that quintessentially American brands like Gap and Ralph Lauren are standing up despite so many negative political feelings in the air.

“Certain U.S. brands have transcended their point of origin,” Clifton noted. “Look at Apple, IBM, Amazon and Intel. People see Apple chiefly as a cool computer brand. And while coolness happens to be a key American characteristic, consumers don’t associate it with U.S. politics.” The brand consultant said the same of Ralph Lauren. “His brand is very American, yes, but it’s almost as if Ralph Lauren embodies placeless and timeless values — you know, country-house living.”

Clifton contended consumers often have two faces. “They can be radical when faced with a market research questionnaire and reactionary at the checkout,” the brand consultant observed. “There are a lot of people out there who’ll tell a market researcher that they’ll only feed their children healthy food and would never go to a fast-food restaurant. But 30 million people walk into McDonald’s every day — and you can bet the ones who answered that questionnaire are among them.”

— With contributions from Nina Jones

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