In the apparel industry, various brands are heavily investing in new brick-and-retail stores. These expansions range from smaller direct-to-consumer (DTC) brands such as Minnow, a swimwear company, to well-established international giants like Abercrombie & Fitch and Pacsun.
Recently, a multitude of companies have either opened or unveiled plans to launch new stores in prominent retail hubs like New York’s renowned Fifth Avenue and the Mall of America.
The global retail market shows signs of slowing despite new store openings, with China’s retail landlords offering discounts due to 9.7 per cent vacancy rates in Guangzhou. Moreover, Canadian retail sales rose by just 0.2 per cent in the last three months, indicating a general market slowdown, while US retail sales also increased by only 0.2 per cent in June, impacted by persistent inflation.
Brands still invest in new stores despite fluctuations in the global retail market because, according to Morgan Smith, founder of swimwear brand Minnow, paying too much heed to small market changes could hinder the brand’s long-term strategy.
Minnow, operating a profitable 92 per cent direct-to-consumer (DTC) business since 2016 without fundraising or venture backing, plans to open its third store in Charleston, South Carolina later this year, following the successful launch of two stores in California in 2020 and 2023.
Kristin Naragon, the chief strategy and marketing officer at retail tech company Akeneo, emphasises that while larger brands are cutting their store numbers, with H&M closing approximately 300 stores in the past year, smaller brands can capitalise on a robust physical presence to their benefit, particularly for customer acquisition.
