BIZMOLOGY — Despite good growth at home, US-based apparel and accessories retailer J. Crew is once again trying its hand and brand in the Asian market. It will enter in Hong Kong this fall with the launch of the J. Crew line of cardigans, khakis, and other clothing at Lane Crawford, a department store comparable to Barney’s New York. A Wall Street Journal article further reports that J. Crew is hunting for prime standalone retail space in a Hong Kong mall, as well as checking out real estate in Beijing and Shanghai.
This move comes four years after J. Crew said sayonara to an unsuccessful expansion effort in Japan. It also comes in the wake of dampened demand for luxury goods in China, a market that traditionally gravitates toward European luxury labels, such as Gucci, and more recently to mid-priced brands like H&M and Zara. Some US-based retailers have managed to gain traction in China, including Abercrombie & Fitch, The Gap, and Levi Strauss & Co. J. Crew is, as some analysts point out, entering China relatively late in the game, but that may not matter.
J. Crew appears to be taking its time in testing out the international waters mainly because it can. It’s not beholden to immediate success overseas, unlike some US rivals who are expanding in emerging markets in order to offset a slowdown in domestic consumer spending. J. Crew, on the other hand, has seen its sales consistently climb over the last five years in both of its two main sales channels: stores and direct market (websites and catalogs). In fiscal 2011 (ends January) J. Crew sales increased roughly 9%, although earnings remained relatively flat. The clothing retailer is aggressive with North American store expansion, having opened 29 new stores in 2011 and looking to add another 42 stores in 2012. Last year, J. Crew strengthened its direct channel by entering into an agreement with an outside provider to fulfill orders from residents of certain countries outside of the US, Canada, and Japan.