Foreign Markets Offer Growth Opportunities
Macys the latest to look abroad
Macys the latest to look abroad
By Sandra Jones
May 11, 2008
May 11, 2008
The treacherous U.S. retail climate is prompting many retailers to turn their sights
overseas.
The latest gambit comes from Macy's, the department store operator struggling to
turn around declining sales.
Macy's announced Thursday that it created a new corporate-level post dedicated to
analyzing international expansion opportunities and appointed 32-year Macy's veteran
Daniel Edelman as president of international retail development. Edelman had been
head of Macy's West in San Francisco.
"We believe that selective expansion internationally will provide additional
opportunities for top line growth in the years ahead," Terry Lundgren, chairman and
chief executive of Macy's, said in a statement. Macy's operates more than 850 U.S.
stores under the Macy's and Bloomingdale's banners.
Bloomingdale's could be the first of the two divisions to move overseas, Women's
Wear Daily reported on Friday. Bloomingdale's executives have visited China and are
said to be eyeing Kuwait, the retail trade newspaper said. Macy's spokesman Jim
Sluzewski declined to comment on the report.
"The U.S. is highly over-stored," said Love Goel, chairman and CEO of Growth
Ventures Group in Minneapolis. Thousands of store closings have been announced
this year, but "there's still too much capacity in the U.S. retail market," Goel said.
Whole Foods opened its first store in London last year. Apple, already in Britain, plans
to open its first stores in Australia, China and Switzerland in coming months. And
Lord & Taylor and Crate & Barrel both have said in recent months that they are looking
to expand overseas.
Abercrombie & Fitch, the teen-clothing chain, said recently that by 2010 most of its
store openings would be international. It opened its first overseas store last year in
London. On Friday the company announced plans to open a second European store
in Denmark next year as well as to make its debut in Tokyo.
Likewise, Kimco Realty Corp., the shopping mall developer, said late last month that
its emphasis has shifted to Mexico as development in the U.S. these days is limited.
Retailers, in general, have been slow to set up shop in other countries because the
U.S. consumer market is so vast, said Jay McIntosh, director of retail and consumer
products group for the Americas at Ernst & Young LLP in Chicago. It's also a risk to
determine tastes and habits of shoppers in other cultures, he said.
Just look at Wal-Mart. The world's largest retailer closed up shop in Germany two
years ago because its American-style operation clashed with European culture.
Luxury stores such as Saks Fifth Avenue and Tiffany have had an easier time
because they have an international following.
The National Retail Federation said more retailers are testing the waters by shipping
goods to overseas customers and selling via the Internet, something Anthropologie
recently started doing.
"A lot of retailers' first step is to go online," said Ellen Davis, spokeswoman for the
retail trade group. "It's a good way to dip your toe in the water without investing a lot in
staff and store locations."
overseas.
The latest gambit comes from Macy's, the department store operator struggling to
turn around declining sales.
Macy's announced Thursday that it created a new corporate-level post dedicated to
analyzing international expansion opportunities and appointed 32-year Macy's veteran
Daniel Edelman as president of international retail development. Edelman had been
head of Macy's West in San Francisco.
"We believe that selective expansion internationally will provide additional
opportunities for top line growth in the years ahead," Terry Lundgren, chairman and
chief executive of Macy's, said in a statement. Macy's operates more than 850 U.S.
stores under the Macy's and Bloomingdale's banners.
Bloomingdale's could be the first of the two divisions to move overseas, Women's
Wear Daily reported on Friday. Bloomingdale's executives have visited China and are
said to be eyeing Kuwait, the retail trade newspaper said. Macy's spokesman Jim
Sluzewski declined to comment on the report.
"The U.S. is highly over-stored," said Love Goel, chairman and CEO of Growth
Ventures Group in Minneapolis. Thousands of store closings have been announced
this year, but "there's still too much capacity in the U.S. retail market," Goel said.
Whole Foods opened its first store in London last year. Apple, already in Britain, plans
to open its first stores in Australia, China and Switzerland in coming months. And
Lord & Taylor and Crate & Barrel both have said in recent months that they are looking
to expand overseas.
Abercrombie & Fitch, the teen-clothing chain, said recently that by 2010 most of its
store openings would be international. It opened its first overseas store last year in
London. On Friday the company announced plans to open a second European store
in Denmark next year as well as to make its debut in Tokyo.
Likewise, Kimco Realty Corp., the shopping mall developer, said late last month that
its emphasis has shifted to Mexico as development in the U.S. these days is limited.
Retailers, in general, have been slow to set up shop in other countries because the
U.S. consumer market is so vast, said Jay McIntosh, director of retail and consumer
products group for the Americas at Ernst & Young LLP in Chicago. It's also a risk to
determine tastes and habits of shoppers in other cultures, he said.
Just look at Wal-Mart. The world's largest retailer closed up shop in Germany two
years ago because its American-style operation clashed with European culture.
Luxury stores such as Saks Fifth Avenue and Tiffany have had an easier time
because they have an international following.
The National Retail Federation said more retailers are testing the waters by shipping
goods to overseas customers and selling via the Internet, something Anthropologie
recently started doing.
"A lot of retailers' first step is to go online," said Ellen Davis, spokeswoman for the
retail trade group. "It's a good way to dip your toe in the water without investing a lot in
staff and store locations."
