General Pants Co. is chasing Millennial customers in the U.S.
Considering that its target market consists of 18 to 30 year olds, the Australian retailer has maxed out its potential in its native country, where its 52 stores cater to Millennials who number less than 4 million. In contrast, Los Angeles County alone is home to 2.2 million people between the ages of 18 and 30, according to General Pants chief executive officer Craig King. Thus, the Sydney-based company is breaking into the U.S. this year, launching a store in Los Angeles in June and following with another in New York by October.
“We’ve been thinking of the States for two to three years,” King said. “California and Sydney are so similar in the lifestyle and the way they dress. It’s an easy transition.”
General Pants is readying to open a 4,200-square-foot space on Los Angeles’ La Brea Avenue, where its neighbors include American Rag Cie and Union on one side of the block and Aether Apparel, General Quarters and Bonobos on the other. Called Local 132, the store will carry exclusively Australian brands, including Ksubi; Insight; One Teaspoon; Zanerobe; Neuw; Rollas; The People Vs, Arvust; Spencer Project; Standard, and Alice in the Eve. As denim priced between $99 and $250 makes up a quarter of its sales and business leans toward the men’s market, the store will have a masculine feel compacted by cement, mid-century-style wood, old tanned leather and copper.
In New York, General Pants is negotiating a couple of locations, specifically on Lafayette Street between Grand and Houston Streets.
King said the majority of the space in the U.S. units will be dedicated to retail. The remaining one-third of the areas will serve as a showroom and an office for its wholesale operations. General Pants owns 50-percent stakes in both Ksubi and Insight. Combining its wholesale and retail businesses under one roof allows it to show retail buyers the full potential of its lines, for instance, the 17 jean washes that it offers for Ksubi, he said.
“These stores will be a chance for the customer and the professional buyer to see a more diverse range and hopefully spur wholesale sales again,” he said.
To be sure, King is aware of the challenges the 20-year-old company faces in the U.S., which, while being the biggest global market, stands as one of the most competitive. The recent closures of contemporary chains Kitson and Scoop have given him a reality check.
“We don’t underestimate the retail environment is pretty tough over here,” he said. “We’re not looking to have 50 stores overnight either. I think it’s really a step-by-step process.”
On the other hand, he said, a void has opened with the demise of Scoop and Kitson. “The people have to go somewhere. I don’t think it’s all going to the likes of fast fashion like Zara and H&M or to high-end either,” he said.
Plus, the company is looking beyond bricks-and-mortar. Shortly after the opening of the New York store, General Pants will activate its e-commerce business.
The 4,200 square-foot-space that General Pants is moving into was quoted last year at $288,000 in annual rent, according to another retailer who viewed it. Declining to reveal General Pants’ revenue and rents, King said their five-year lease on La Brea is “an appropriate range for that space.” It’s actually a bargain compared to one of its stores in Sydney, which commands annual rent of $2.5 million, he said.
Still, that doesn’t allay concerns from local shopkeepers that La Brea might face the same fortune as Robertson Boulevard, a street once popular with independent retailers that has been overtaken by megabrands such as Chanel and Lululemon Athletica.
As for the incursion of major corporations like General Pants onto up-and-coming retail spots, “I don’t think you can avoid that over the journey. That’s just often how business works,” King said. “For us, it’s the more, the merrier. We think critical mass is a good thing.”
Besides, General Pants has maintained the jocular humor that often characterizes its fun-loving culture. In a jab at the U.S. presidential election, the black and white sign plastered in front of the La Brea store declares: “The Aussies are coming. Don’t tell ‘the Donald.’”