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Phase Eight has blueprint for succesful US launch

At a Drapers Dinner with Marks & Spencer’s international director Jan Heere last week, there was a lot of talk about expanding into the US.

The general consensus (around my table at least) was that, while it’s still too competitive a market for many British retailers, the attraction of trying to make it stateside is becoming increasingly difficult to resist.

Topshop has successfully penetrated the particularly saturated young fashion market, despite being up against strong competition from Forever 21, Wet Seal, American Eagle Outfitters, American Apparel and Urban Outfitters, to name but a few. Topshop’s New York launch in 2009 was followed in 2013 by openings in Las Vegas and Los Angeles and a deal to open Topshop and Topman in 14 of Nordstrom’s department stores. It is now planning a 40,000 sq ft flagship in New York, to open this autumn, which will be second in size only to the Oxford Street branch.

Last week, Phase Eight revealed plans to expand into the US. The retailer seems very confident of its potential for success - and succeed it might, as Phase Eight has a strong product and proposition.

The longevity of its design team, some of whom have been in post for at least 10 years, has driven sales in the UK. Meanwhile, it has been growing its international sales steadily since it opened its first overseas store in the Swiss town of Fribourg in 2012. It now has 102 stores in 13 countries and international sales are due to make up 20% of total revenues by January 2015.

Chief executive Ben Barnett says that’s why the time has come to tackle the tricky US market.

He believes Phase Eight benefits from having several routes to market – standalone stores, concessions or shopping centre locations – which means they can adapt easily to local American markets. “We’re not just going to take the Westfield store and dump it in New York,” he told Drapers.

Topshop’s decision to sell a 25% stake in Topshop and Topman to US private equity firm Leonard Green & Partners, as well as the hook-up with Nordstrom, underlines the importance of finding strong partners for US expansion. Phase Eight partly attributes its initial success in Australia – it has seven stores there now and plans to open a further six by the end of October – to a strong partnership with department store retailer David Jones. It is now in the process of investigating partners in the US. 

It sounds like Phase Eight has the blueprint for a successful US launch - one its more cautious counterparts will watch with interest.

The Drapers Dinner was sponsored by Quantum Retail.

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