August 13, 2001-- Home Textiles Today,
Globalization has become to the new decade what e-commerce was to the last one: the business community's gotta-do-it strategy.
We're often reminded that there are a couple of flaws in the concept. Not every company is capable of operating on a global level, nor is such a strategy sound for all businesses. There's only room for so many Wal-Marts, Carrefours and Metros in the world. And on the specialty side of the business, the Toys "R" Us format may translate just fine in Israel and Tokyo, but Beds "R" Us would have a much tougher go.
Nonetheless, there is another model emerging for global expansion — brand partnership with established retailers elsewhere.
Federated Department Stores started down the path earlier this year when it opened departments carrying its house brand I.N.C. women's apparel in Japanese department stores owned by Kosugi Sangyo Co. Ltd. The early results have been successful enough that Federated now plans to double its I.N.C. presence from 15 to 30 stores over the next two years.
In addition, the Federated Merchandising Group, which oversees the expansion, last week announced that it has struck similar agreements in other countries. Myer Grace Brothers, the largest department store operator in Australia, will soon take on Federated's Charter Club, Style & Co. and Jennifer Moore women's apparel, Alfani for men and Greendog childrens' wear. Also, South America's second largest department store operator, Ripley, will incorporate into its merchandise mix I.N.C. apparel and Tools of the Trade cookware.
Federated Merchandising Group president Leonard Marcus was straightforward in commenting on the strategy. "As the world marketplace becomes increasingly smaller, Federated continues to ... leverage our investment in private brand development, as well as to strengthen the brand names through international exposure."
Think the group won't manage to find a similar extension for Charter Club home goods?
In the same vein, Martha Stewart Omnimedia announced in recent weeks that it has struck a deal that will take the Martha Stewart Everyday brand — a Kmart exclusive in the United States — into 226 Seiyu retail stores in Japan.
The program will launch next month with bedding, bath, kitchen textiles, window treatments, dinnerware, cookware, bakeware, utensils and cutlery — and Seiyu plans to expand into other MSE categories in 2002.
Globalization is unquestionably the business world's new gold standard, a realization that prompted Business Week this month to publish its first-ever ranking of the top 100 global brands.
There were no home textiles companies on the list, although Polo/Ralph Lauren took 85th place ("everything from Polo ties to towels") and Ikea landed in the No. 46 spot. But that doesn't mean there isn't an innovator who can't find a way to put home textiles on the list.
And really, it might be nice to see somebody give Martha a run for her money.
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