THE QUEST FOR GROWTH
LONDON — From the U.K. to Russia and from Portugal to Sweden, retailers are border-hopping across Europe looking for new opportunities.
The fast-paced retail expansion across the continent runs the gamut from traditional specialty and department stores and mail-order houses to venues that are relatively new for Europe, according to a report by Verdict Research Limited of London. These emerging areas include home shopping and warehouse clubs and factory outlets.
Where will the growth come from to satisfy all these stores? The Verdict report sees growth opportunities for classic career wear for women in their 30s and 40s, as well as fashion targeted at teenagers and women in their early 20s. The report notes that as economic woes continue to curtail consumer spending, shoppers across Europe are eager for bargains.
U.S. retailers have been the most active in expanding, with five specialty chains crossing the Atlantic in the last 18 months. At the same time, mail-order firms are also breaking into the European market. Among the most notable merchants venturing into Europe are:
l Talbots, the career-oriented women’s apparel chain, which opened its first store in Bentall Centre at Kingston, Surrey. Talbots has plans for three more stores in 1995 and projects 25 to 30 outlets in the U.K. overall, and eventually plans to open 150 to 200 stores across Europe.
l The Gap, which has been in the U.K. since 1987, opened its first unit in France in 1993, a concession space at Galeries Lafayette. In April, Gap opened its first freestanding shop in the Passy-Plaza shopping center in Paris.
l Following a successful test in the U.K., the Lands’ End catalog expanded into France this year, while cataloger Eddie Bauer, a subsidiary of mail order giant Otto Versand, launched its book in Germany.
l J. Crew’s catalog division formed a joint venture with French mail-order firm Trois Suisses to bring its catalog into France as the first step in the company’s European expansion program.
Meanwhile, European retailers are also broadening their reach, the Verdict report points out.
Spain’s Zara, which sells “affordable” apparel for young men and women, as well as children, is planning to open 100 stores in France in the next three years, and 15 to 17 stores in Portugal. Zara’s sister company, Massimo Dutti, which sells upscale men’s wear, is opening stores in Sweden, Norway and Portugal.
Portugal is starting to attract foreign retailers, attracted by two new shopping centers being built in Lisbon.
In October 1996, the Columbo shopping center is due to open in the capital city. The one-million-square-foot mall will be anchored by French hypermart Continente and is being marketed to major international retailers such as J.C. Penney. In addition, El Cortes Ingles is developing a shopping center called Parque Eduardo VII in the city, with the department store acting as the anchor.
British variety store retailer BhS is moving into Spain, with a unit being built in the Baracaldo shopping complex, which is anchored by hypermarketer Eroski.
Eastern Europe is also emerging as an untapped market for retailers, according to the Verdict report.
Stockmann, a leading Finish department store, is opening a store in St. Petersburg, Russia, and another in Tallinn, Estonia. Stockmann joins Spain’s Galerias Preciados, which opened a small unit in Moscow at the end of 1993, and British variety retailer Littlewoods, which has three shops in Moscow.
Meanwhile, France’s Galeries Lafayette is set to open its first store in Berlin.
Warehouse clubs, which have blitzed the U.S. in recent years, have hit the U.K. The U.S.-based PriceCostco blazed the trail with the opening of its first unit in Essex in November 1993, followed shortly thereafter by Nurdin & Peacock’s Cargo Club opening in Croydon, Surrey. Since then, PriceCostco has opened another unit, while Cargo Club has developed two more units.
Home shopping via television and computers is drawing increasing interest in Europe as well. In October 1993, QVC was launched in the U.K. on BSkyB, while Telechat began selling clothes on the airwaves in France.
On the cutting edge, the Verdict report notes, is Otto Versand, the catalog and home shopping retailer, which is currently test-marketing its products on CD-Rom. The company has made about half of its 1,200-page catalog available on disc for home viewing.