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Crate & Barrel puts British expansion plans on ice

Caution over instability in Europe leads American chains to concentrate on internet marketing.

Crate & Barrel, the American homewares chain, has put its plans for the UK on hold. It is thought the group was concerned about current European volatility and the competitiveness of the UK market.

Earlier this year Cushman & Wakefield property agents were hired to search for stores. The group held talks for a store in the Westfield London and Westfield Stratford City shopping centres and also looked at Regent Street.

American retailers are viewing the UK and Europe with caution due to fears over the economy.

Abercrombie & Fitch, the US fashion brand, suffered a slump in its shares in New York after it said last week that sales fell at its European flagship stores in the last quarter.

Some overseas retailers in the UK have had to tweak their store portfolios after trialling a number of locations before getting it right. Juicy Couture, owned by Liz Claiborne, has put the lease of its Bluewater store on the market as part of a restructure and expansion of its London stores. It recently opened in Westfield London and is searching for stores on Regent Street and in Covent Garden. This could be followed by the closure of its Bruton Street store.

Despite the change of strategy for Crate & Barrel, which is owned by the German catalogue giant Otto Group, it has successfully set up a website for UK consumers and is shipping products to the UK. Many US retailers have started trialling UK expansion using the internet. Macy's and Bloomingdales department stores have opened their websites to UK and European customers and now ship goods across the Continent. J Crew established a UK website and, after a successful trial, is now looking for a London shop.

The next US retailer to debut in London will be the lingerie chain Victoria's Secret. Victoria's Secret is thought to be planning to bring its younger brand, Pink, when it opens its flagship store on Bond Street next year. It will follow this opening with a store at Stratford City.

Back in the US, retail sales climbed 3.8 per cent in October, but missed market forecasts of a 4.4 per cent rise – causing some analysts to raise concerns for the crucial Thanksgiving and pre-Christmas sales period.

In the UK, a report commissioned by Brand Alley found 63 per cent of shoppers won't be cutting back on Christmas this year overall, despite the economic climate. But it found 91 per cent expect to concentrate on discount and sales shopping in the run-up to Christmas, ahead of the January sales – and, with online vouchers and websites a source of discounts and deals , this will compete with the traditional high street.

Andrew Wade, director of equity research retail for Numis Securities, said: "There is more pressure for high street retailers to discount this year."

Source : Laura Chesters - The Independent

06 November 2011
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Thank you for the excellent presentation that you gave at Woodbury Park on Thursday morning. It was very interesting and thought-provoking for our Retail members. The feedback has been excellent.

Martin Elliott. Chief Executive - Home Hardware.

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