American stores go bananas for UK despite the gloom

Banana Republic is leading a new fashion invasion from the States, in defiance of economic forecasts

A new crop of US retail chains is vying to convert the special relationship between British consumers and American brands into cash by launching themselves into the UK market. The fashion press is in a frenzy, but retail experts are dubious that this latest American invasion will end happily, given the gloomy outlook for retail spending.

Just 13 days into the new year and already the City has seen calamitously poor Christmas trading updates from Marks & Spencer, Next and Dixons. Shoe retailers such as Dolcis and Stead & Simpson are battling administration and Sir Stuart Rose, M&S's chief executive, has warned that trading will remain tough until well into 2009.

Nevertheless, Banana Republic, Gap's younger, chic-er sister, is one of a clutch of retailers to have earmarked London as the first outpost of their expansion into Europe.

Intermix, a New York-based boutique chain, Theory, a designer clothing brand, and Anthropologie, an older version of Urban Outfitters, are all scouring London for potential sites. They follow on the heels of Abercrombie & Fitch, the brand beloved by US college students, which opened last Easter. A&F is also seeking sites for its younger-focused Hollister chain.

Steve Sunnucks, the president of Gap Europe, said customers had been clamouring for the group to launch Banana Republic in Britain for years. "The timing of the opening was led by the considerable interest and awareness of the brand in the UK, combined with a great location on London's Regent Street becoming available."

The chain, selling preppy, upmarket office wear, will open a three-storey outlet in late March in part of the old Dickins and Jones building, also occupied by Armani Exchange.

Despite the hype building up ahead of Banana Republic's arrival – fashion magazines have tipped its opening as the event of the spring – some retail experts are sceptical about its prospects. Although the chain is the best-performing of Gap's stable of brands, which includes Old Navy, it had a poor Christmas, missing its targets with a 1 per cent drop in underlying store sales in December compared with the previous year.

It also had a rollercoaster 2007. Its underlying sales, a key measure that strips out the boost from any new space opened, either failed to grow or fell for five months of the 12. In addition, although Banana Republic is popular with Britons flexing their credit cards in America – giving it unusually strong brand recognition in the UK for a company with no European outlets – that could change when shoppers discover how much the company intends to charge for its clothes this side of the Atlantic.

A spokeswoman said its ranges would be priced "higher" than in the US, reflecting its desire to be regarded as a premium brand alongside competitors such as Reiss and Jigsaw. It will also have to claw back the higher cost of doing business in the UK. Dresses are likely to cost upwards of £100, at least double their Gap equivalents.

Richard Hyman, who runs Verdict Consulting, a retail consultancy, said: "It will certainly struggle to persuade people of its value credentials. I think it will be very difficult for them."

Even analysts backing Banana Republic to succeed, including Bryan Roberts, of Planet Retail, believe it could find this year tough going. "If you had to pick a time to enter the UK clothing sector it probably wouldn't be 2008," he said.

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...

Guru Careers: C# Project Team Lead

£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

Guru Careers: Graduate Editor / Editorial Assistant

£16 - 20k: Guru Careers: A Graduate Editor / Editorial Assistant is needed to ...

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine