With a stagnant or saturated UK market, depending on what type of business you run, it’s easy to see why people are looking further afield.
But success is not guaranteed. In fact, alongside those stories of double-digit growth, there’s another reason why everyone is talking about it: no individual or UK fashion business (that I’ve spoken to, at least) feels completely confident with their international strategy.
One retailer told me this week that he is still getting to grips with the returns policy of the overseas department store his concession is stocked in. The business has a returns rate of 40% (compared with single digits in the UK) because shoppers are allowed to return an item within 180 days of purchase. He is reluctant to pull out because the brand needs the exposure, but the situation is playing havoc with cash flow.
For now, he is choosing brand awareness. The solution seems to be to alter this returns policy, but at the risk of upsetting a customer that is used to a certain way of purchasing. And no one wants to hurt the customer.
It will be interesting to see how Arcadia deals with Macy’s 180 days returns policy if the group goes ahead with plans to launch Miss Selfridge in the US department store.
The appetite for international expansion stretches from the mid-market to designer level. Mulberry’s autumn 13 campaign featuring model-of-the-moment Cara Delevingne has an international customer in mind. The British brand reported two profit warnings in the lead-up to suffering a 36% drop in pre-tax profits for the year earlier this month, blaming a stagnant UK market. The focus is now very much on appealing to the Asian shopper, but the challenge for Mulberry is to retain its quirky British heritage while elevating the label’s global awareness. Alexa Chung may work brilliantly in the UK as an ambassador, but Delevingne, while also a true Brit, has huge international appeal.
This campaign alone won’t solve Mulberry’s problems. According to insiders there is internal discontent about the strategy of new chief executive Bruno Guillon (ex Hermès) to elevate the brand’s positioning and raise prices. But I think this campaign could help. It retains the Mulberry DNA while addressing the brand’s need to expand beyond its UK heartland.