The men’s and women’s innerwear, activewear and accessories brand is planning to open two European stores this spring and summer — first in London and then in Oberhausen, Germany — as part of its global real estate expansion plans.
“The brand has been resonating and doing so well, so it makes sense for us to expand physically,” Kim Dolder, senior vice president and general manager at Gilly Hicks, told WWD. “And our customer loves connecting with us in real life. For the Gilly brand, physical location is so important because of our brand purpose, and that’s to create happy places. Key to our strategy with the stores is not just selling product but also engaging with our customer. And we thought there’s no better way to do that than with an in-real-life experience, where our customers can experience the store and grow brand awareness.
“Stores really matter,” Dolder continued. “Fran [Horowitz, chief executive officer of Gilly Hicks’ parent company Abercrombie & Fitch] mentions this a lot. The right size and the right location and the right economics [matter, too]. And the retention that we get from our customers who meet us physically in our stores, is much higher than the customer retention that we see online. So we know that having these physical stores matter in achieving that goal.”
The European locations represent Gilly Hicks’ second and third permanent stand-alone stores. The first location opened last summer in Columbus, Ohio. Gilly Hicks also has 25 side-by-side locations next to Hollister stores and 60 shops-in-shop locations, or Gilly Hicks carve-out areas at the back of Hollister stores, globally.
The 3,000-square-foot London location, set to open street-level location at 39 Carnaby Street sometime in late spring, will be followed by a 2,500-square foot mall-format store at the Westfield Centro in central Oberhausen in early summer. Dolder said more locations are planned this year, both in Europe and Stateside, although she declined to say how many, in which markets or when they will open.
“These two stores represent the first two of a handful of stores we’re going to be opening in 2022,” Dolder explained. “We’ve had great success in [the Europe, Middle East and Africa regions] with our other formats: our side-by-side stores, and even the carve-out stores that we have inside of Hollister locations. The EMEA customer just loves the Gilly brand. So it makes sense for us to expand in that market. That being said, we are expanding our stand-alone footprint in the U.S. as well. It’s just that the first two are coming in Europe first.”
The new stores will include “in-real-life activations” and other events that will allow shoppers to interact with the brand and its core values of diversity and wellness, Dolder said.
“We relaunched our brand purpose midway through this last year and it’s all about helping Gen Z find their happy place,” she explained. “So we wanted the stores to feel light, happy and [be a] fun environment.”
That includes one wall dedicated to streaming Gilly’s social feeds in store, as well as a gender-neutral fitting room.
“We’re a brand for all genders, regardless of how they identify,” Dolder said, adding that a two-way locker system inside the fitting rooms allows store associates to swap out products without opening the fitting room doors. The stores are also not divided by gender, but rather by category.
“We don’t have a split down the middle, so it’s [not] male on one side and female on the other. Everything is merchandised together,” Dolder said. “Gen Z told us that was really important to them. We’re not going to define what is feminine or masculine. So, for example, you can get an item, let’s say a similar active item in male or a female fit, but it comes in the same colors and patterns.”
Gilly Hicks launched as a women’s innerwear brand in 2008, but failed to catch on with consumers. The brand closed in 2013 but in 2017, Abercrombie reintroduced Gilly, selling it at Hollister stores. Gilly Hicks opened four temporary pop-ups in the U.S. in 2019 — in Tysons, Va., Miami; Cerritos, Calif., and Friendswood, Texas — as a way to test and learn. Last year, the brand relaunched with both men’s and women’s across multiple categories, in addition to the permanent store.
“Obviously, you can read the writing on the wall; [the Ohio store] has done really well for us, which gives us the confidence to open these additional stand-alone stores this year,” Dolder said. “And we’ve evolved the brand to be a lifestyle brand to where we have underwear, loungewear and activewear. That’s significant because, just a few years ago, we were just an underwear brand.”
Today, the fast-growing activewear category represents 20 percent of the Gilly business and is continuing to grow at a double-digit pace. Sleepwear and loungewear are also on the rise, as well as what Dolder coins “two-mile wear.”
“So, things that people wear around the house, but are also comfortable with wearing within two miles of their house, to run and get coffee, or to go to class,” she said.
The executive declined to say how much Gilly Hicks’ revenues represent within the overall Abercrombie & Fitch company, which also includes the Abercrombie, Abercrombie Kids, Hollister and Social Tourist brands. A&F had total revenues of about $905 million in its most recent quarter and has a market cap of roughly $2 billion.
In the Hollister brand — which includes the Gen Z-focused Gilly Hicks and Social Tourist brands — total net sales were more than $522 million last quarter. (Dolder said the Abercrombie brand is meant for Millennials.)
“And so, you’re just beginning to see the investments from the larger company and the Gilly Hicks brand,” Dolder said. “We’re talking about launching our own website; launching our own social experiences. You’ll see Gilly show up in more social places: We’re in the process right now, within the next few weeks, you’ll start to see us show up on TikTok. We know Gen Z is on TikTok. And then we’re working on brand partnerships to bring Happy Place, our brand purpose, to life. So you’ll see more from us there. And then, obviously, the larger store roll out. So, so much more to come from this brand.”