U.S. fashion brands need to adapt their strategy if they want to compete in the U.K. market.
American retailers such as Forever 21 are losing space in the U.K. with shoppers preferring home brands. This is because British brands are more client focused, offer better shopping experiences and are likely to have a more loyal supply chain, analysts told CNBC.
Data from Kantar WorldPanel showed earlier this month that almost 75 percent of British clothing and footwear are bought from British brands. In the remaining 25 percent, European retailers take 20 percent of the share – meaning that American stores are at the bottom for British consumers.
“U.S. real estate is shrinking with British shoppers preferring home grown brands,” Kantar WorldPanel said in its research.
“As shopper become savier to deals, price comparison and value for money, American retailers face tougher challenges such as passing on the cost of high store rents and U.S. to U.K. supply chains to consumers,” the research group said.
But the list of problems for U.S. brand stores in the U.K. is larger: online shopping allows consumers to buy American goods cheaper than in stores; and American brands are focused too much in London flagship locations, where rent is higher and the average consumer is a tourist.
“London shoppers, however, are actually not the most lucrative; they are ranked fourth in average highest annual spend per shopper, spending £758, behind Scotland, the North East and Lancashire,” the research noted.
“By only catering to these shoppers, an imported brand is virtually unknown outside of the capital and therefore bases its success on a selected group of British shoppers,” Kantar WorldPanel said.
Forever 21, for example, stormed the U.K. market a few years ago but it ordered a retreat last year, ordering reviews of its Oxford Street, Liverpool and Birmingham stores and closing down spaces in Glasgow and Stratford (East London).
