Mickey Drexler, the CEO of J. Crew, doesn’t really like partners: “I don’t want to visit a store,” he noted, “where I have to discuss what I like or don’t like about my store.” Therefore, for J. Crew’s expansion into China, the clothing retailer is going it alone.
In the past year, J. Crew’s online site expanded its international shipping capacities to more than 100 countries. Through that experiment, it quickly realized that Asian markets were huge buyers. Therefore, instead of partnering with a local firm—as it did during a failed expansion attempt into Japan—J. Crew is establishing independent stores, as well as separate retail spaces in department stores.
Both Hong Kong and mainland China appear attractive to U.S. and European retailers, especially as China’s middle class grew exponentially in the 2000s. Thus many luxury companies have already made headway among newly wealthy Chinese consumers. However, recent reports suggest that the growth of this luxury market in China is slowing down, leading consumers to seek out more midrange options, including Zara and H&M.
Although most of the retailers that appear successful in China appear European—from Gucci to H&M—several U.S. retailers also have achieved a substantial status. For example, the Gap is also enjoying growth there—and Mickey Drexler was the CEO of the Gap before he joined J. Crew. J. Crew also found its international marketing director from another retailer: Coach, perhaps the most successful foreign fashion brand in China.
Overall, the retailer’s position is one marked by notable confidence. It continues to expand “organically” in the United States, so its international growth is not driven by desperation. And as Drexler calmly notes, “If we didn’t succeed in Hong Kong, life goes on. We’ll figure out alternatives.”
- What makes China such an attractive market for various fashion retailers?
- Is Mickey Drexler’s confidence justified or misplaced?
Source: How Do You Say Crewneck in Mandarin? J. Crew Expands into China