U.S. retail lull means prep time for international expansion
LAS VEGAS (Reuters) - U.S. retail giants in home furnishings, food and clothing are expected to push into emerging markets such as Mexico, Brazil and China, once the U.S. economy and cash flows improve, executives said.
"There are a lot of retailers who are in defensive mode right now, but a lot of retailers still have ambition to go abroad," said Anthony Buono, executive managing director of CB Richard Ellis (CBG.N), the world's largest commercial real estate services company.
Global retailers are eyeing new markets, Buono said at the International Council of Shopping Centers' RECon retail real estate show in Las Vegas last week.
Growth in Latin America, the Middle East and Asia as well as the prospect of a shrinking domestic economy is causing U.S. corporations to look abroad.
U.S. brands already expanding globally include Collective Brands Inc (PSS.N), owner of PayLess, which has its highest-performing stores in Colombia and Dunkin' Brands, which is operating Dunkin' Donuts shops in 31 countries from Bulgaria to Qatar.
Wal-Mart Stores Inc (WMT.N) is due to open its first cash-and-carry store in India on Saturday.
AutoZone Inc (AZO.N), Gap Inc (GPS.N) and Brinker International (EAT.N), the owner of restaurant chain Chili's, are expanding in Mexico.
Frozen yogurt maker PinkBerry, which has inspired cult-like status in its home market of Los Angeles, is opening a store in Kuwait City this summer, with another in Dubai to follow.
DIVERSITY
Joe Albright, Wal-Mart's vice president of international real estate, said diverse formats designed to appeal to many had made Wal-Mart's international unit a $100 billion business.
For many retailers, franchises and joint ventures offer common ways to expand because they minimize risk.
"It gives us an outlet to sell our product in, but we're doing it with a third party, who puts up the capital to open the store," said Levi Strauss spokesman Jeff Beckman. He added Levi's is now seeking "opportunistic" deals afforded by the economic downturn.
Brinker, operator of Chili's, plans to open up to 18 eateries in Mexico this year, adding to its portfolio of nearly 200. AutoZone is looking to add to its 160 stores in Mexico.
"We're here to do deals," AutoZone director of real estate Terry McKee said while at the convention.
The top brands sought by tourists, according to a study by mall developer Taubman Centers (TCO.N) and Shop America Alliance are: Nike (NKE.N), Levi Strauss, Gap, Polo (RL.N) and Abercrombie & Fitch (ANF.N). All of them are planning overseas expansions. Continued...
