the UK, Europe and North America
Sign-up here for a free 1-day retail tour of Paris, Madrid, London, Berlin or Los Angeles – so we can demonstrate what we can do for you.
Even before committing any management time or resources to international expansion, it makes sense to explore and brainstorm – to understand what’s possible. As retailers, we get so much more value from walking shopping centres and high streets than from reading presentations, so Brands Abroad offers retail tours of the most important cities in Europe, the UK, and North America (Paris, Madrid, London, Berlin, Vienna, New York, Los Angeles and San Francisco). In as little time as one day per city, it’s possible to visit the main shopping centres and high street retail locations, get a first-hand understanding of customers, competitors and traffic flows, and discuss in real-time about country specifics, economics, and typical entry strategies. With an additional day per city, it’s possible to meet with local experts, get a good understanding on unit availability and pricing, so as to form an initial view on market viability for your brand. Why not select one or two cities to explore to start your journey?
The journey then continues with a detailed assessment of which countries provide the highest expected returns for the lowest possible risks for your brand. This involves understanding the key elements of your brand’s success, as well as identifying what needs to be present in new countries to replicate this success, to form your brand’s specific country prioritisation criteria. This criterion is then used to evaluate and shortlist all potentially attractive countries. Typical criteria include:
Brands Abroad already has most of this research and analytics already prepared from having operated across Europe and North America for a number of years, so the major workload in this process stage is to refine and apply this data specifically to your brand to highlight and prioritise those countries that are most likely to provide your brand with the highest return at the lowest risk. This process stage typically takes 2-4 months and typically involves several in-country trips as well as substantial desktop research to reach a definitive decision on which country is best for your brand according to your specific criteria.
Often it’s too difficult to decide between two countries that have a similar prioritisation score. And often brands have a nagging question about how strong consumer acceptance is likely to be in a country with different culture or demographics. The great news is that it’s now possible to easily conduct a short-term concept trial using a high-profile temporary store location. This can be done without committing any in-country resources and, with Brand Abroad’s support, your Pop-out store can be made to closely replicate your brand so to deliver statistically relevant results. This concept trial removes the majority of the guess-work or doubt – without serious in-country investment..
Other ways to test you brand in new countries prior to committing significant CapEx is to trial though other channels – such as ecommerce, concessions or wholesale. Brands Abroad has relationships with a number of ecommerce marketplace operators – such as ASOS and Zelando – who provide broad brand exposure across the UK and Europe for minimal upfront investment. Likewise, there are a number of department stores servicing different countries and different demographics that provide a solid platform for testing your brand’s appeal for very low upfront investment. Similarly, there are wholesale opportunities across the UK, Europe and the US for innovative brands and products. Brands Abroad can help you navigate through all the channel opportunities to help you choose the right one for your brand’s launch.
Once the target country is selected, a detailed business plan for that country needs to be created. The business plan provides a step-by-step roadmap to launching in the new country, including detailed budgets, timelines and resource requirements. Each country is different in terms of what’s required to establish and expand, and it’s these nuances where new entrants typically make costly mistakes, lose valuable time, and get bogged-down in bureaucracy. Brands Abroad’s policy is no surprises – so all cost elements are detailed and explained, including in-country labour costs and laws, landlord security requirements, standard and non-standard lease conditions, and typical construction costs. A key output of this business plan phase is a country-specific store profitability proforma to be used to evaluate all new store offers as they are received from landlords. Another key output of this stage is a fully detailed project plan which lists every action, person responsible and due date right through to the opening day of the first store in-country and beyond. The final key output of this stage is a resourcing plan, detailing what additional resources you’ll need to execute the entry strategy and beyond – both in-country and back in your head office. At the completion of this stage, which typically takes 1-2 months, you will have a very clear understanding of the costs, timing and resources you’ll require to launch your brand in the new country.
To operate in a new geographic region, there may be some work required to adapt your business model or supply chain. This is very common for retailers moving from other continents. This may be less of an issue for retailers moving from the UK to Continental Europe or vice-versa but is still very important to evaluate pre-launch to understand specific in-country issues such as product compliance and marketing requirements. This stage assesses all elements of your business to ensure the new geography can be serviced efficiently, including:
This phase typically takes 1 month to complete the diagnostics. Then, depending on the results, it can take several more months to get your organisation ready to supply and service the new country.
In addition to checking for gaps in your organisation, this stage also identifies what skills and capabilities your home organisation can leverage in order to minimise additional in-country costs and personnel. Brands Abroad’s experience is that new countries can leverage the majority of the back-office functions from their home office without the need for additional in-country expenditure.
Establishing a legal entity in a new country is relatively easy to do, but needs to be done in the correct way to streamline all other subsequent formation requirements such as opening bank accounts, registering for VAT/Sales Tax, applying for the right to employ people, applying for permits to trade, applying for the right to sponsor foreign skilled workers, etc. Brands Abroad has seen too many companies established incorrectly and this makes the whole process of incorporation much more bureaucratic and frustrating. We can make introductions to pre-selected accounting firms in each country who we have used before and who we know can provide the correct advice and services at competitive prices. We are ready to run a tender process for you according to your requirements. You may also require tax advice prior to establishing a new subsidiary in order to ensure profits can be repatriated tax efficiently to your home country. Brands Abroad can make introductions to regional tax advisory experts if necessary. The full company incorporation process varies by country, but typically takes 1-2 months if managed carefully.
Getting the team and culture right is critical to retail success. This stage is all about ensuring your new in-country team are employed and trained properly in order to execute in the same way as you do in your home country. This all starts with the decision whether to choose a high-flyer from within your organisation to spearhead the launch of the new country, or whether to hire a seasoned local executive and train them all about your company in advance. Both options have advantages and disadvantages, and each needs a detailed people plan to ensure the right team members are employed and trained in the right way. Brands Abroad can introduce you to pre-qualified recruiters in each country who can guide you through the process of hiring your top talent, and Brands Abroad will advise you on market rates and conditions for recruiters and senior team members to ensure you are treated like a local.
This stage also deals with the complexities of employing and remunerating people correctly – as every country has specific labour laws to comply with and some countries, such as France and Germany, have particularly onerous labour conditions if you don’t prepare in advance. You’ll most likely be able to manage most HR functions from your home country, but you may need an outsource payroll agency to ensure you comply with all in-country labour laws. In this case, Brands Abroad can make introductions to good-standing agencies if required. And if opening in a country with a different language, there is likely to be a lot of planning involved in cost effectively translating your key training and operating documents, so needs to be planned well in advance.
The key to managing costs is open market tendering. You always do this in your home country, so launching in a new country should be no different. Brands Abroad has access to a host of in-country service providers and live benchmark data to ensure you pay market price every time. Typical services that need to go through a market tender process are as follows:
Brands Abroad can support you tender any of these services and provide you with a detailed apples-to-apples comparison of each submission to ensure you make a fully informed decision. This is particularly useful in foreign language countries where important conditions may by not fully understood through high-level translation. And, once engaged, Brands Abroad can oversee these service providers and support your in-house experts in each of the above disciplines to ensure the quoted service is delivered on-budget and on-time.
The most time-consuming task for a new entrant is to secure your first new store (or first cluster of stores). This is typically a very frustrating process of being presented with random offers from landlords and/or brokers and then visiting these offers only to be disappointed by the location, size, or rent expectation from the landlord. This can consume huge amounts of time, demoralise the team, and quickly derail the new country launch. Brands Abroad advocates a more systematic approach to maintain momentum and morale and deliver better locations more rapidly:
By this stage, your in-house team should be able to manage most of the above critical activities, but Brands Abroad can assist wherever necessary to maintain the momentum and ensure market-pricing as necessary.
Retailers commonly complain that, once established in a new country, organic growth can be slow while retailers wait for high quality retail locations to become available. A way to propel growth is to acquire individual stores and/or a network of stores from failing retailers and then rebrand the acquired stores. This can be a cost-effective way of expanding if managed carefully, especially in the current market where a number of retailers are failing, and landlords are becoming more reasonable. Brands Abroad has ready access to insolvency firms across the UK, Europe and North America and can identify potential acquisition targets that might be of interest. And, when necessary, Brands Abroad has the expertise to perform detailed financial, legal and operational due diligence to ensure a fast and low risk transaction.
Global expansion is a long and complex process involving all departments and consuming valuable management time. The key to global expansion is end-to-end project management – so that everyone knows exactly what they need to do at all times. Brands Abroad can provide this end-to-end service delivery. Even though each of the stages above can be individually quoted and delivered as a specific project, Brands Abroad will ensure that all activities wrap together into a full lifecycle project with rigorous monthly milestone reporting.
Sign-up here for a free 1-day retail tour of Paris, Madrid, London, Berlin or Los Angeles – so we can demonstrate what we can do for you.