J Crew sets it’s eyes on new Regent Street store


Premium fashion chain is latest in fresh wave of US clothing and food retailers to chance their luck on the UK high street.

Models present designs from J Crew during this year’s fashion week in New York. Photograph: Eric Thayer/AFP/Getty Images

When Michelle Obama’s favourite clothes store, J Crew, opens its first major British outlet on Regent Street in London this week it will be overrun with US retailers flocking her to UK competitive market.

Hot on the heels of the bright premium fashion retailer could be American Eagle, a casual clothing chain, which is thought to be looking to sign its first outlets in London, probably at the Westfield shopping centres in Stratford and White City.

Meanwhile, home wares group Williams-Sonoma is set to open its first store in the UK, a branch of its upmarket West Elm brand, on Tottenham Court Road in central London on 5 December. It is understood to be looking for at least five more London stores and may take its Pottery Barn fascia there next year.

J Crew itself has already opened a small menswear store on Lambs Conduit Street in Bloomsbury and plans a women’s store in Brompton Cross later this month, with more stores expected.

The newcomers follow a string of high-profile arrivals in the past five years, including lingerie specialist Victoria’s Secret, young fashion chain Forever 21, and Abercrombie & Fitch’s younger sister brand Hollister and its lingerie boutique, Gilly Hicks.

While McDonald’s and KFC have long been familiar to British shoppers, a new wave of more upmarket US fast food joints are also arriving, with Shake Shack and Five Guys having opened their first London outlets this summer.

With the economy showing signs of improvement, US retailers are looking to the UK to find a new avenue of growth. “They often see the UK as a good jumping off point for Europe,” said Maureen Hinton, an analyst at market research company Verdict.

James Ebel, of property advisory firm Harper Dennis Hobbs , (which has helped a number of US retailers enter the UK, agrees) told the Guardian: “When a US retailer reaches an optimum number of stores in its domestic market they turn to Canada and then to Europe or Asia. Many choose the UK because it is a sophisticated retail market, while London is at the centre of the worldwide fashion scene. It’s important to be here.”

Peter Mace, head of central London property at advisory firm Cushman & Wakefield, told Guardian: “There’s a bit of a herd mentality. Forever 21 paid a lot of money to open on Oxford Street and that has given confidence to other brands.”

Also at the head of the pack is Victoria’s Secret, which now has five UK stores after launching at Westfield Stratford in time for the London Olympics. The retailer wants to add five or six more locations next year and could open up to 50 full-sized stores, while owner Limited Brands could potentially bring over other names such as Bath & Body Works. Martin Waters, president of international for Limited Brands, told investors earlier this year: “By concentrating on a relatively tight geography we can see a path to a $1bn business.”

But the new wave of arrivals are entering a fiercely competitive market – particularly in fashion, where homegrown chains such as Topshop, New Look and Oasis already vie with European giants including Zara and H&M.

Gap, the grandaddy of US clothing retailers in the UK, has suffered a rollercoaster ride since it opened its first store in 1987, and has been slightly reducing its presence in recent years. Others, from women’s clothing store Talbots to kidswear chain Gymboree, have pulled out after struggling to make an impact, while the likes of Brookes Brothers and Urban Outfitters’ sister brand Anthropologie have arrived with great fanfare but failed to get beyond a couple of outlets. Best Buy, the giant US electricals store, beat a rapid retreat, closing all 11 stores in 2011 after less than 18 months in the UK.

“The record of success of US retailers coming to Britain, especially in clothing, ought to be more than sufficient to put anyone off coming here,” said Richard Hyman, an independent retail consultant. “US retailers see the UK as a source of relatively easy incremental growth borne out of insufficient knowledge of the market.”

He suggested few US retailers had made serious profits as they face heavy competition and a very different trading environment from the US. Property taxes and rents are much higher in the UK while store sizes tend to be smaller, meaning retailers need to rapidly adapt to a new way of working. Exporting goods to a diminutive chain over the Atlantic also ramps up costs, so most US clothing retailers try to price UK goods at the same figure in pounds as they would in dollars back home – in other words much higher prices once exchange rates are taken into account. That can prove off-putting for savvy shoppers if what’s on offer is not sufficiently different or of high quality to justify such a premium.

Totally British …

Gap The grand-daddy of US clothing retailers came in 1987 but only brought its more upmarket Banana Republic brand chain to the UKover in 2008. It now has 145 Gap and eight Banana Republic shops in Britain.

Victoria’s Secret Ubiquitous US lingerie specialist opened its first UK outlet at Westfield Stratford shopping centre in London last year as it aims for a $1bn (£600m) business in the UK.

Forever 21 The young fashion chain launched here two years ago in Birmingham and now has eight shops but is already looking to downsize that particular outlet.

Abercrombie & Fitch: Opened its sole UK store shop in 2007. Its Hollister brand, which has 30 outlets, is now across Britain but its Gilly Hicks lingerie chain, with four shops, has proved less popular.

Urban Outfitters: First opened in the UK in 1998, selling a mix of trendy outfits, vintage and homewares at 25 shops. Its more upmarket Anthropologie brand opened in 2009 but its two outlets have struggled to find its niche in the UK.

J Crew Plans to open three London stores this year, with more expected.

American Eagle Thought to be looking at opening two London stores.

Williams-Sonoma The aspirational design-led homewares group is planning two of its West Elm outlets.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s