How global retailers reach out to America - global retailers look to the U.S. to start stores, real estate professionals must accommodate different cultures - Brief Article

From The Gap to LVMH, from Ikea to Prada, global retailers, no matter where they're from, are, collectively and individually, expanding their presence in the U.S. market. The economic decline in the Far East and the economic strength and vitality of Europe and North America are providing the impetus for expansions that are focusing, more than ever before, on U.S. metropolitan area retailing destinations.

Global retailers are following a pattern of U.S. population density in tandem with concentrations of high per capita income. Especially fan high-end French and Italian luxury companies, it's a path that leads directly to the country's biggest cities. Encompassing the East, West, South, Midwest and Southeast regions, New York (first and foremost), San Francisco, Los Angeles, Chicago, Miami, Houston and Dallas are primary retailing markets.

Atlanta, Boston, Washington, D.C., and Scottsdale, Arizona are also gaining interest from global retai1ers. In a class of its own, and moving up from a secondary to primary retail location, is Las Vegas. Fast-paced development of mega-resort/casinos (many with destination shopping arcades), double-digit increases in population and the city's status as one of the world's most popular convention locations are fueling this desert city's extraordinary growth.

Global retail expansion in the U.S. is not confined to metropolises. According to a recent population study by the U.S. Bureau of the Census, more than 50 percent of Americans will live in a suburb by 2000. Having heard the call of these compelling demographics, a notable array of the world's top American and European-based retailers are locating in suburbia.

Long a wasteland for those in search of style, today, amid suburban cul-de-sacs and country clubs, one can find Saks, Tiffany, Cartier, Prada, Gucci, Holland & Holland, Neiman Marcus, Coach, Baccarat, Sephora and Christian Dior, among others, who are bringing luxury goods to the doorstep of affluent suburban customers. Costa Mesa, California; Oakbrook, Illinois; Troy, Michigan; Chevy Chase, Maryland; Manhasset, New York; Short Hills, New Jersey; and Greenwich, Connecticut are some of the suburbs that have benefited from global retailer expansion to affluent edge cities.

With a growing number of global retailers reaching out to America's cosmopolitan cities and affluent suburbs, what must real estate professionals be prepared to offer to affect long-term mutually beneficial, multiple deal relationships?

Accustomed to doing business all over the world amid differing monetary systems, social customs and business practices, global retailers are looking to affiliate with full-service companies by every definition of the term, from the obvious -- being able to find a suitable location -- to the subtleties of exceptional customer service.

As a broker, an essential element in dealing with European and Asian retailers is being able to understand the respective philosophies in acquiring real estate locations. For European retailers, location is of primary importance. Many European designers feel the strong need to locate near of next to their contemporaries or competitors, whereas Asian designers seem more willing to experiment or take on a pioneering, type of strategy when scouting for retail space. The rationale behind these two very different approaches is that Europeans appraise real estate for its brand-building qualities, while Asians appraise real estate for its ability to present one's designs.

Objectivity is key. Global retailers seek real estate professionals with a sound understanding of the U.S. market who will analyze a deal on its own merits and make honest evaluations that support the retailer's global brand building and revenue goals.

A short-term viewpoint on the part of a broker, i.e., negotiate a deal that yields the biggest immediate commission, will at best lead to a short-term relationship. Global retailers also seek brokers with experience with similar retailers. They prefer working with professionals with an in-depth knowledge of a specific market's players, landlords and other brokers as well as the retailer's direct competitors, knowledge that can fast forward the retailer to where they need to be.

The real estate broker must also be willing to build reputation and business by serving in an extended consultant role. Regardless of whether this is a global retailer's first or hundredth store, the broker must be capable of providing insightful analysis of proven and cutting-edge locations, retail trends and marketing techniques in order to match a global retailer's multi-faceted brand-building and revenue goals with location, neighborhood, clientele and that ever-elusive quality known as image.

COPYRIGHT 2000 Hagedorn Publication
COPYRIGHT 2001 Gale Group