every channel every angle ISSN 1362-2315 Issue 196 November/December 2011
Direct retailers go global to offset slow growth at home
By Miri Thomas
Direct sellers expand beyond their borders
News
pages 2-8 Bodie and Fou and Debenhams debut catalogues, Ironmongery Direct and Lovehoney test TV advertising, and more
With the economic environment remaining tough in Britain and multichannel retailers feeling the pinch, many are finding a bright spot in expanding into international markets. Take Asos for example. In the first half of 2011, total retail sales increased 60 percent to £211 million, despite only inching up 8 percent in the UK. Compensating for the slow growth at home, international sales soared, rising 150 percent year-on-year to £122 million. During the period, Asos launched three new international websites, for Australia, Spain and Italy. Another cataloguer/etailer banking on international growth is Simply Be. In the six months to 27th August, the plus-size apparel specialist experienced “modest” growth in the UK, said chairman Lord Alliance in a statement, but international revenue more than doubled during the period—up 173 percent to £4.1 million. Losses on the international activities more than doubled too, reaching £2.7 million, as the company invested more than £3 million to build its customer database. But, Simply Be expects these losses to peak at £4 million this year, with Lord Alliance stating international expansion will “deliver long- term growth despite the short-term impact on profits,” as the customer database next year will have a better balance between new and existing customers.
Tactics
pages 9-24 Supercharging your marketing efforts and a focus on ECMOD Direct Commerce Show 2011
Now add Argos and Shop Direct to the roster of
UK merchants expanding into overseas markets. Home Retail is heading east, to launch Argos into China via a joint venture with home appliance manufacturer Haier Group. The partnership will see Home Retail and Haier develop an Argos- branded multichannel retail business targeted at the Shanghai region. Launching in 2012, the long-term aim is to rollout the offer to regions throughout China using Argos’s retail expertise coupled with Haier’s distribution capabilities in the country. Back in the UK, pretax profits at Home Retail Group, which also owns Homebase, plunged 70 percent to £28 million in the first 26 weeks of the year. Sales declined 6 percent to £2.57 billion during the period as consumer confidence continued to weaken. Shop Direct, the parent company of Littlewoods,
also noted the “marked slowdown in consumer confidence and spending” in the past six months, according to group chief executive Mark Newton- Jones. “We don’t believe the environment will become any easier in the foreseeable future and, as such, we are budgeting for a tough year ahead whilst continuing to invest in areas for future growth,” he said in a statement. Part of that investment will be a phased launch of its apparel title Very to the USA and 47 other countries. “Tough conditions at home are definitely
driving activity,” says ecommerce and multichannel consultant Kristine Kirby. “Savvy retailers know that while one market may be down, another may be on the up.” Also fuelling the trend for UK retailers opening
their online shops to global consumers, she adds, is that “it’s hard to be on the web and not be multinational: Customers, especially in the US, can now easily buy UK magazines on newsstands, they see companies like Asos and want to buy from them. Customers don’t recognise borders on the web.”
continued on page 3 Views
pages 25-36 Q&A with Jane Hudson of Presents for Men and a review of the Running Bare website
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