Retailers’ Origins Play A Big Role In Successful Global Expansion

When it comes to successful global expansion, does where a retailer is from matter?  

In its recent Destination Retail 2016 report, JLL writes a retailer’s origins can greatly impact its global expansion efforts. The top retailers ranked with a strong global presence either have origins in the United States or Europe.

JLL Retail Brokerage and Capital Markets president Naveen Jaggi says US pop culture and the fact that American-founded brands can bring a piece of that culture to other countries is what drives their success.

“Both Europe and the North Americas do well because both retail economies are very mature and worldly, in recognition of brands and trendy,” Naveen tells Bisnow. “The two want to stay ahead of the curve in terms of fashion.”

Tommy Hilfiger ranked No. 1 on JLL’s list as the top global retailer—the brand has stores in 94% of the world’s top 140 cities, and Levi Strauss and Nike followed closely behind as the second and third top worldwide retailers, both founded in the US. Levi has 2,800 stores in 92% of the world's top cities, and Nike's factory stores operate in 91% of the 140 top global cities. 

Interestingly, the top three brands operate predominantly in wholesale in the states, but have many storefronts in other countries. "Outside of the US their strategy is to have freestanding stores, and they’re very much known as a retail brands,” Naveen (pictured right, beside JLL’s Global Retail Leasing Board Chairman David Zoba) says.

In terms of future outlook for worldwide retailers, Naveen tells us Asian markets, China in particular, may see some pullback in retail expansion in the near future. The country has grown to maturity so quickly that its ability to absorb additional retail is slowing. Naveen also projects the middle class will see rapid growth globally, and retailers will begin to tailor prices to appeal to those consumers.

“You’ll likely see more and more luxury brands start to produce products that will target aspirational consumers that can afford to buy something expensive once or twice a year,” he says.