Spain’s Springfield, the fast-growing men’s fashion chain, is flexing its expansion muscles.
The 750-unit chain, owned by retail giant Cortefiel, hopes to enter China, Brazil, India and Turkey in the near term and is on the hunt for strategic partners to leap into the U.S. market as soon as possible.
Overall, Springfield intends to add another 250 stores by 2014 to reach 1,000 units worldwide. The bulk of the shops will be freestanding, with 600 self-owned and around 400 franchised. With 500 million euros, or around $682 million at current exchange, in sales last year, Springfield hopes to draw 60 percent of revenues from overseas markets in five years, up from 40 percent now.
Springfield is Cortefiel’s leading expansion banner alongside lingerie firm Women’s Secret, a 520-unit chain. Following the coattails of archrivals Inditex (Zara) and Mango, Cortefiel is also engaged in a global expansion campaign to open 440 franchised outlets by 2013 to operate just more than 2,000 total stores. Currently, about 40 percent of the company’s stores are franchised.
Global expansion aside, the label is stepping up plans to open unisex stores and hopes to open most of its future outlets under that format.
Managing director Luis Gonzalez said Springfield will open the majority of its own stores in Europe, where it can maintain tighter control of operations. Meanwhile, the franchise model will be fleshed out in other “strategic” markets including Mexico, Russia, South Korea and the U.K. Springfield is also keen to enter the booming Chinese, Brazilian, Indian and Turkish markets and is already in talks with potential partners to carry out that plan.
“We are starting to visit these countries and looking for master franchisers, so which market we enter first will depend on which partner we find, when and where,” Gonzalez said, adding there is no particular pressure to arrive in any one country first. “These are all big emerging markets where we are convinced our brand can do very well,” he added.
Any partner would have to be large enough to cover a specific country or region, however. In Brazil, for example, Springfield is seeking a franchiser that can manage that country as well as all or part of South America.
In the U.S., where Inditex and Mango have a notable presence, Springfield is negotiating with several unidentified department store operators (as well as other multiformat retailers) to open at least 100 corners in the near term. Gonzalez said Springfield could forge an alliance similar to the one Mango struck with J.C. Penney in December. Under that agreement, Mango will launch its MNG by Mango store in up to 600 J.C. Penney stores by fall 2011 in the “largest rollout ever of any fast-fashion concept.”
A Cortefiel spokeswoman said the retailer may also simultaneously launch Women’s Secret in the U.S. “We could bring Springfield or Women’s Secret at the same time or launch both individually, depending on the type of deal we can sign,” she pointed out.
Under Cortefiel’s franchise model, partners buy its products and own the stores. Cortefiel gets an entry fee and margin on the sales but partners make a higher mark-up than with the competition, according to the company.
In Latin America, where Cortefiel has expanded aggressively in recent years, Springfield has 21 stores in Mexico and five in Peru. In addition to Brazil, the retailer is seeking to expand into Venezuela, Argentina and Chile. It will also deepen its foothold in Central America and the Caribbean, where it recently arrived in Dominican Republic.
Though mostly known as a young men’s fashion retailer, Springfield is transforming itself into a unisex retailer, similar to Inditex and Mango. Gonzalez said most new stores will come in that format.
“We’ve been a men’s retailer for 22 years, but many of our customers also demanded female apparel so the market opportunity was obvious, and with Springfield an established brand, we decided to launch Springfield Women,” Gonzalez said of the rationale behind the strategic shift. “The move has been a great success and we want to continue growing that way.”
Of last year’s sales, women’s apparel contributed $95.5 million and this is expected to increase sharply in coming years, Gonzalez said.
He said the move was precipitated by Inditex and Mango shifting toward unisex offerings in recent years. Barcelona-based Mango is also fleshing out its men’s line Homini Emerito, which is gradually being rolled out across its 1,400-store network.
To grow its business, Springfield also hopes to expand its accessories franchise, which already features watches, glasses and fragrances, Gonzalez said.
Springfield’s closest rivals are Inditex’s Pull & Bear, which sells casualwear to young shoppers, as well as Zara Men and Zara Women’s younger collections. However, when it comes to Pull & Bear, Springfield is more casual and offers a greater range of apparel and accessories, Gonzalez said. Springfield caters to 25- to 35-year-olds, whereas Pull & Bear targets 16- to 20-year-olds.
“We don’t cater to fashion victims,” he said. “Our clients our more casual and comfortable with their clothes. They like fashion but are not obsessed with it.”
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