A BUMPY ROAD

Byline: Sharon Edelson

NEW YORK — Country Road found out about the pitfalls of marketing a global brand the hard way.
In 1988, the Melbourne, Australia-based company came to the U.S. with a collection of casual clothing and big ambitions. But a combination of the wrong fashion, frequent changes in top management and mounting losses — the company reportedly lost $23 million between 1988 and 1994 — left the chain anemic.
The underlying problem was that it had lost its focus, which is the kiss of death when trying to build brand loyalty anywhere — especially in a foreign market.
At the height of its retail operations in 1990, Country Road had 22 stores in the U.S. It now has 15 stores in this country and 150 worldwide.
Fred Panetto, the company’s creative director, said Country Road had trouble communicating its Australian heritage and unique point of view to American audiences. The retailer had originally been called Country Road Australia, but deleted the Australia a few years ago.
“We deleted the word Australia from our title because we are a global company now, and it’s not just about Australia, even though we reflect the Australian way of life,” Panetto said. In addition, consumers were confusing Country Road’s Australia of well-dressed men and women strolling cosmopolitan streets with popular perceptions of Australia, such as the outback and “Crocodile Dundee.”
The company is once again attempting to tie into its Australian roots with in-store photographs “of people wearing our product within an Australian environment,” Panetto said.
“Country Road represents the Australian way of life, which is still pretty unique in the world,” Panetto said. “There’s a great balance of work and leisure, which is what we’re striving for in [the U.S.]. Country Road reinforces that way of living and provides simple, uncluttered clothes.”
Noted for its classic pleated trousers for men and women in pure wools, wool blends, linen and cotton, Country Road also makes simple, relaxed suits in washed-out colors that represent the Australian landscape.
Discussing the company’s recent problems, Panetto said, “We strayed away from our brand’s strength and tried to be too much of a fashion brand in America. The only unifying concept with stores in other parts of the world were the visuals [ads] and the name itself.
“There was a mix of styles in the store, and people didn’t know what it was about,” he added. “We have a name — Country Road — yet merchandise was too muddled to reinforce the concept of relaxed dressing. That’s all changed now. Everything is under one global umbrella to reinforce our brand image.”
In addition to Australia and New Zealand, Country Road is sold in Singapore, Hong Kong and Japan. Panetto said the product is now essentially the same for the world market.
“We keep in mind the different idiosyncrasies and seasonal needs of each market, but there needs to be core product that’s global and really reinforces our brand,” he said.
Country Road is talking expansion again.
In November 1994, Country Road named Michael Warner chief executive officer. He had been president of Cache Inc., another specialty chain, and is a former Macy’s women’s merchant.
In January 1996, Country Road received a cash infusion from a new partner, Itochu Corp. of Japan. Under the terms of the agreement, Itochu bought 25 percent of Country Road’s U.S. operations. The Itochu Fashion System Co. Ltd. unit will license one of its subsidiaries, World Co. Ltd., to market Country Road products in Japan.
“Due to our growth and business in the last two years, we are planning to expand in the U.S., but have no commitments yet,” Panetto said.
“We’re looking at locations throughout America and intensifying our presence in New York, Washington, D.C., and Boston. In addition, we want to target San Francisco, Los Angeles and Seattle, where we have no stores.”

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