Reserved’s UK launch shows how imports are reshaping retail

If you have walked down London’s Oxford Street recently, past the old BHS flagship store, you may have spotted Kate Moss staring back at you. The British supermodel is the new face of Reserved, the Polish clothing retailer that is due to open its first UK store at the converted BHS outlet next month.

Kate’s face initially appeared on multiple posters plastered across the shopfront, but Reserved has now stripped these away to reveal its gleaming new store. Now a huge image of the Vogue favourite dominates the window, which will surely tempt Oxford Street shoppers into the outlet when it opens its doors on 6th September.

Part of LPP SA, one of the fastest growing fashion retail groups in Europe, Reserved is a Polish competitor to other on-trend clothing retailers like H&M and Zara. Since it opened its first shop in 1998, Reserved has expanded to over 450 shops across 18 countries. Its decision to hire Kate Moss as brand ambassador, as well as take up a British mainstay like the old BHS flagship site, is a clear statement of intent as it looks to expand and claim market share in the UK too.

Reserved is one of many international brands setting up shop in the UK at the moment. Indeed we at The MBS Group are encouraged by the number of calls we get from international companies that are planning to set up operations in the UK at the moment.

It suggests that confidence in the market is still high, and that brands are attracted by all of the vibrant opportunities offered by this country and its highly engaged consumers. One of the big challenges, of course, is putting the right executive team in place as companies must strike the right balance between a local approach that is still true to their overall brand and group-wide strategy.

In addition to Reserved, we have had the news recently that Australian homewares retailer House, which has 104 stores in its home country, is targeting a huge roll-out in the UK with plans to open 75 stores within the next three years. Meanwhile US furniture retailer Sonder Living, which already has sites in the US, Asia and the Middle East, is debuting in the UK with a new space at Harrods in September. This week it was also revealed that Speciality Restaurants, the India-based listed operator, has set up a UK subsidiary as it maps out launches for its various restaurant brands.

Britain has always welcomed overseas brands, but the sheer volume of new launches has got me thinking about the changing nature of our retail and consumer markets. Brand loyalty has been declining in recent years due to several trends, including the role of technology in presenting consumers with ever-growing choices. Alongside this we have the legacy of the global financial crash of 2008, which led to a fundamental shift in the way consumers think about brands, with value and discount hunting becoming a priority for many.

It is no coincidence that just as we are seeing more and more international brands land on these shores, German imports Lidl and Aldi are continuing to eat up market share from the UK’s big four grocers. Indeed new Kantar Worldpanel data shows that even though Tesco, Sainsbury’s, Asda and Morrisons all grew sales in the 12 weeks to 13th August, they now collectively account for 69.3% of the UK grocery market – down from 76.3% five years ago.  

At the same time Lidl had increased its market share to a record high of 5.2%, overtaking Waitrose to become the UK’s seventh largest grocer. There is nothing to suggest that a retailer like Reserved cannot have a similarly disruptive impact in the fashion space.

There are plenty of examples of successful recent launches by overseas retailers. Think of Cotton On, for example, the Australian retail group which launched the first UK store for its lifestyle brand Typo last December. The brand opened its second store at The Bentall Centre, Kingston in south-west London last week and is planning further launches.

Typo at Westfield Stratford. Credit: Retail Week

There are cautionary tales too, though, such as the case of American Eagle Outfitters, which recently decided to wind down operations at its three UK stores less than three years after opening in the country.

Regardless of how imports fare, their arrival presents more and more competition for existing players in the marketplace, requiring them to rise to the challenge and continue fighting for market share. It won’t be long, after all, before the next Lidl, Aldi or Reserved arrives at our high streets or shopping centres. | @MoiraBenigson | @TheMBSGroup