Studio F, Colombia’s fast-growing women’s apparel chain, hopes to operate 500 stores in five years, including stand-alone units in the U.S. and Brazil.
The retailer also expects revenues to reach $250 million by then, up from a $180 million forecast for 2014, according to the chain’s commercial director Carlos Eduardo Alvarez.
To boost margins, Studio F is building an apparel factory next to its warehouse in Cuautitlán, Mexico State, this year, the executive said. The site, the cost of which he declined to disclose, will sharply boost the 150-store chain’s bottom line when fully operational in early 2015.
“We have to pay a 30 percent duty for anything we send to Mexico,” Alvarez explained. “If we can produce there, we are making 30 percent more.”
Mexico is Studio F’s biggest international market, where it intends to have 60 stores by 2017.
“We want to continue growing in Mexico. This is a very large market with cities of 30 million people,” Alvarez said. Studio F, which has 43 shops there, has won over Mexican women with its Latin-inspired fashion, he added.
In the near to medium term, Studio F hopes to deepen its presence in Central and South America. In Central America, growth will focus on Costa Rica, Panama and Guatemala, while Chile and Peru will be key South American markets.
Studio F is also eyeing Uruguay but has no current plans to enter Argentina, Alvarez said. The firm hopes to enter Brazil by 2019 though Alvarez would not provide a timeline.
Argentina’s “political and economic environment is too complex,” he noted. “We don’t see stability there.”
Alvarez said Studio F is also keen on the U.S. and is scouting locations in Miami (including Lincoln Mall) to inaugurate its first flagship next year.
All of Studio F’s new stores will be wholly owned.
“We don’t want to be part of any corner or department store,” Alvarez said. “We sell our clothes in our own shops.”
While Studio F is often compared to Mango and Zara, Alvarez said the company has key differentiators from its Spanish rivals. The biggest one is that it makes apparel specifically for Latin women. “Our clothing is designed for the Latin figure which is completely different from the European or American one,” Alvarez noted. “Latinas are more voluptuous, exuberant and exotic.”
Unlike other fast-fashion brands, Studio F is more focused on quality than volume, Alvarez stressed. It also has a stronger presence in jeanswear.
“We are slightly costlier than Mango,” he said. “We source our fabric from top suppliers in Italy; fabric you can’t make cheap clothes with.”
Studio F has its own factories in Cali and Medellín, Colombia, helping it slash production costs. However, it sources some accessories and apparel from China, an activity that contradicts its “high quality” claims, industry observers said.
That said, it’s clear Studio F is doing something right. In the next three years, same-store revenues will grow 8 to 10 percent and 20 percent on an all-store basis. Profits are also set to leap by around that much, according to Alvarez.
That’s in stark contrast from the $100 million in revenues in 2009 when the brand was little known outside owner Carlos Acosta’s Cali hometown and key Colombian cities.
Studio F also received a strong reception during the latest Colombiamoda fashion trade show in Medellín.
The firm, which celebrated its 20th anniversary during the event, introduced a new swimwear line called Aqua, fronted by Brazilian model Izabel Goulart.
Next up is a winter line in December which will be the retailer’s sixth annual collection.
“Most of our clothes are for warm markets, but now that we want to grow in Chile and Peru [cooler Andean markets], we need to make apparel for those countries,” Alvarez said.
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