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Careful global brand expansion

November 22, 2004

Last week, two fashion brands announced their global expansion plans. The Gap’s Banana Republic stated its intent to move into the Japanese market in 2005.

banana republic goes to japan

Then the Japanese brand Uniqlo, announced its desire to expand into the United States. Ironically, Uniqlo achieved significant domestic success by creating the low-cost utilitarian clothing market, with a format modeled closely on The Gap.

uniqlo to the us

uniqlo’s uk website

Many brands fail in their global expansion plans because they believe their domestic formula can be replicated globally. Even the most global of brands, McDonald’s tailors its offering to meet local needs. Wisely, Banana Republic announced that they plan to study the Japanese consumer closely, to ensure its offering matches Japanese tastes.

Uniqlo’s recent efforts at expansion have been problematic. It’s lack of insight on the tricky UK market cost it dearly, this year, it closed 16 out of its 21 UK stores in a fast track plan to achieve profitability.

Uniqlo should take time to study the US market and get its offering right. It should look at the efforts of cult overseas fashion retail brands, Zara and H&M who have both adopted very cautious approaches to US expansion. H&M has just slowly started moving West, first with a store in Chicago and now plans for a San Francisco store. This expansion is happening four years after the company opened its first store in Manhattan

h&m moves to san francisco

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