AMERICANS ARE THE HOT PROPERTIES IN ENGLAND
LONDON — In the reverse of Paul Revere’s cry, the British are now yelling, “The Americans are coming! The Americans are coming!” And it looks like they’ll be pouring in for several years to come.
So many American brands are flooding into Britain that its prime shopping streets are beginning to look like American malls. Most of the action currently is in London, where such brands as Ralph Lauren, DKNY, Guess and Donna Karan Collection already are established, and the next 18 months will see the arrivals of CK Calvin Klein, Tommy Hilfiger, Nautica, Eddie Bauer and a mega-Lauren store. And all the brands have plans to roll out eventually into other British cities with freestanding stores. These are just the launching pad for building significant wholesale operations.
Donna Karan, Ralph Lauren and CK Calvin Klein already are strongly represented throughout Britain in various product categories, especially underwear, fragrances and activewear, and the other brands hope to follow similar routes.
“The reason these brands are coming here is that London is strategically important because it’s the gateway to Europe,” said Ann Pitcher, fashion director at Harrods. Many of these brands are in such demand by British consumers that they are literally on the streets before they are in the stores. Hilfiger, for example, won’t officially launch his apparel in Britain until he opens his freestanding men’s wear store in Sloane Street here this August. But British teenagers have been wearing Hilfiger-logoed apparel since last year, buying either counterfeit versions or parallel-imported clothing at street markets throughout Britain. Parallel imports are when street traders buy legitimate Hilfiger apparel in the U.S. and bring it into Britain to sell at street markets. The brand recognizes the danger that the knockoffs and parallel imports might erode its business before it even begins. Hilfiger recently sued the British chain Littlewoods for allegedly selling parallel-imported clothing, although the retailer claims the designer has no case because the apparel is genuine merchandise.
“American brands are definitely hot here,” said Ashley Heath, senior editor at the magazine The Face. “One of the wider reasons is that Britain through the Eighties and Nineties has steadily become more American because of the arrival of hip-hop, MTV and, in its way, even sports. There’s also a whole transatlantic style exchange going on, with many American designers looking to Britain for ideas and vice versa.”
There’s also a more basic reason for an upsurge in demand for American brands — marketing bucks. Karan, Guess, Lauren, Hilfiger and Klein and their various licensees are spending millions advertising in the U.K., from television to bus shelters. In some cases, like Guess, brands advertised here years before they even arrived, to build awareness.
“There is a direct link between marketing spending and demand,” said Ellen Morton, fashion director at the 51-unit House of Fraser department store chain.
Nautica has established an office in the U.K. to oversee its launch of freestanding stores and a wholesale operation, and Adrienne Vittadini recently opened an office here to handle its wholesale business. House of Fraser recently added the U.S. brand Laundry to its collections, while Harrods has been keen to install a Banana Republic in-store shop for years. Old Navy also is rumored to be looking at the British market to join its sister chain, Gap.
“There is going to be a steady stream of American brands, although these companies have to be careful to get their pricing right,” Pitcher said. “The shipping and duties generally mean that U.S. brands are 35 percent more expensive here than there by the time they arrive. That’s a problem for department stores because in many cases, brands that are in the contemporary or bridge market in the U.S. are often lifted into the designer level here and they become too expensive. It’s an issue that no one is really addressing.”
“If U.S. designers want to grow their businesses, the obvious next step is overseas, and the U.K. is the obvious choice,” Morton of House of Fraser said. “Many of these companies are now public and their shareholders want to see solid growth. The only way they can deliver that is to go global.”