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Retailers show appetite for expansion: For every shop in Europe that closes, two new shops open

The US has overtaken Italy as the largest exporter of cross-border retail fascias. Michael Kors, Superdry, Cos and 7 For All Mankind are the most expansive retailers.

JLL recently launched the new Destination Europe 2015 report which analyses the expansion and presence of 250 international retailers across 57 key retail markets. In comparison to Destination Europe 2013, a shift has occurred whereby mainstream and premium retailers have generally expanded at a faster rate than established luxury retailers, and therefore have moved up the rankings. H&M joins Zara as the joint leaders of the retailer coverage league, with 100% presence across the 57 key European markets. They are followed by Mango and The Body Shop in the rankings.

The US, driven by expanding premium retail brands, has overtaken Italy as the largest exporter of cross border retail fascias in Europe. The most expansive retailer in our sample is the American premium retailer Michael Kors, followed by Superdry, Cos and 7 For All Mankind*. In addition, many European retailers have also shown impressive expansion in the past two years, including Ecco and Hugo Boss. Looking to the future, an influx of brands is expected to enter the European market from the Asia-Pacific region.

“Czech Republic is on par with European trends, having observed an inflow of new market entries from both U.S. and European brands such as Michael Kors, the North Face, Superdry, Tiger, Tosca Blu, Minelli, le Temps des Cerises and Pennyblack. The majority of new comers are only opening stores in Prague, mostly via franchise as opposed to a direct operation. Established retailers are pursuing expansion such as H&M and Mango and/or considering introducing new concepts. Prague remains the most attractive market for international brands whether from the mainstream, premium or luxury sector, the latest addition on Pařížská being Moncler,” says Beatrice Mouton, Head of Retail Agency CEE at JLL.     

Blanka Vačkova, Senior Analyst at JLL, adds: „The number of retailers with an 80% or greater coverage of the 57 key European markets has increased from nine to thirteen since the last survey two years ago. One of these is Starbucks, one of the two representatives from the Food and Beverage sector in the top 25, together with Nespresso, a new comer to the top list. These two retailers were the most expansive brands in the F&B sector in Europe. In the Czech Republic, whilst Starbucks has expanded from Prague into the regions; Nespresso opened its second location in Centrum Černý Most last autumn.”

Commenting on the outlook for retailers in Europe, James Brown, Head of EMEA Retail Research & Consulting at JLL observed: “While the recovery is certainly multi-speed in nature, Europe’s retail sales growth outlook is the brightest since the start of the decade. We expect international retailer expansion to continue its momentum across the key European retail markets; however physical expansion is more careful, more considered, and more selective than ever before, as sweeping structural changes further redefine retail and retail places. A consequence of this is considerable churn in retail stores in the European market. As a general rule, in the last two years, for every two stores opened, one store has closed down as retailers seek to work their stores harder and smarter.”