By  on March 4, 2005

NEW YORK — Another European retailer wants a piece of the American market.

Terranova, an inexpensive and trendy youth-oriented chain based in Italy, has been operating a store in SoHo since December and is scouting locations here and in other U.S. cities. “You can say we sell cheap stuff, like H&M. Our prices are very, very low and the quality is very good,” said Lorenzo Ciunci, commercial supervisor for Terranova in the U.S. “We are going to start to open more stores in six months.”

He sees Terranova having 100 stores in the U.S., averaging 6,000 square feet, in five years. 

For now, however, Terranova is just nibbling at the competition, which in Manhattan is primarily H&M, Forever 21, Zara and Old Navy. Terranova’s sole U.S. store is at 594 Broadway near Houston Street, but it’s begun working with real estate firm Cushman & Wakefield to find additional locations. Ciunci cited San Diego, Philadelphia, Miami and Manhattan as initial targets. Terranova wants to franchise stores where owners buy Terranova products on a consignment basis, or it would own stores where the real estate is more expensive.

“They need high foot-traffic areas,” said Alan Napack, director of retail services, Cushman & Wakefield. “We’re focusing on finding a space on 34th Street and possibly Chelsea as their next possible Manhattan locations.”

Worldwide, there are 364 Terranova stores in 32 countries, primarily in Europe and the Middle East, as well as in Latin America, China and The Philippines. Terranova is a division of Teddy, the Rimini, Italy-based manufacturer and distributor of fashion brands under various labels, such as Terranova and Rinascimento in women’s, and Terranova and Etnic in men’s, which are sold at Terranova here.

The company, founded and owned by Vittorio Tadei, generated revenues of about 200 million euros last year, or $262.4 million at current exchange. The vertical formula focuses on low prices, trendy styles, a multiplicity of color, and shipping new looks and colors each week to encourage rapid inventory turns. Among the bestsellers are stone-washed and vintage jeans at $50, denim jeans with rhinestones for $66, cargo stretch capris, $50, and acrylic turtlenecks, $32.99. Recently, stretch cargo capris in velvet were offered in 10 colors and sold for $10.99 at clearance. Much of the merchandise seems inspired by urban streetwear, hip-hop, a touch of Abercrombie & Fitch, and sports and collegiate-inspired logos. Items are on sale everyday, while bigger promotions are staged monthly and clearances run twice a year.  Ciunci acknowledges H&M’s dominance. “They’re like the Ikea of women’s,” he said. “Whoever has the best price has the customers. That’s what H&M has taught everybody.”

However, he feels Terranova has advantages in men’s wear by offering “the same price, but more quality and fashion.” He cited best-selling sweaters including V-necks in cotton stretch priced at $16.50; mohair sweaters for $32.99, and stretch button-down shirts for $12.99.

The 6,000-square-foot SoHo store, which has a mezzanine for selling, is budgeted to generate about $5 million in sales its first year. Terranova actually entered the U.S. three years ago with a store in the Garden State Plaza in New Jersey, which closed last year. They did “a bit of retooling,” including efforts to bring prices down, and “wanted to launch in a higher-profile setting,” said Napack.

Kind of the same strategy as H&M, albeit on a smaller scale. 

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