Cracking the US market: What fashion retailers need to know

Why are we talking about it now?

Despite the saturation of the US market, UK fashion retailers are still working hard to crack it. Young fashion retailer River Island is eyeing sites in New York, while Ted Baker has just opened a flagship store on 5^th Avenue as it further expands across the country. French Connection, however, has found the going tough. Yesterday (Thursday) it revealed that its partnership with Sears, that saw it selling clothes in the US department store since 2010, has come to an end.

How can fashion retailers crack the US?

Partnerships with well-known US brands, such as Topshop’s recent tie up with US department store Nordstrom, can help raise awareness and act as a good foot in the door for many British brands. Another good way to build momentum is online – not only is it a low risk way of testing the market, but it also produces helpful data when it comes to deciding where to set up shop first.  Effective marketing can also help UK brands launch in the US. Topshop’s popularity among US celebrities helped to build brand awareness before it made the move, creating excitement among consumers when the retailer opened its first store.

Which retailers are likely to succeed?

The UK retailers that have made the jump over the pond tend to be middle market brands, according to Verdict analyst Kate Ormrod. While the US has its own strong retailers at the upmarket and value ends of the spectrum, it doesn’t have such a strong offer in the mid market. “UK retailers have seen the gap in the market and they’re playing on that.” Brands who successfully emphasise their ‘Britishness’ also tend to do well. “London and UK fashion is seen as quite cool in the US, and brands tend to play on that,” says Ormrod.

What are the challenges of US expansion?

While US has lots of advantages – not least the cultural similarities and lack of language barrier and the size of the market - there are challenges too. While its large size is a good thing in many ways, it’s also difficult to get an immediate presence everywhere in the US – expansion takes time. Retailers must choose key cities and bide their time. Not only this, but it’s an extremely competitive market. UK retailers may well have a chance of doing well, but they’ll have to work hard for it.