Business

Cath Kidston continues advance as targets Latin America

Woman wearing floral print Cath Kidston dress Image copyright Cath Kidston
Image caption Cath Kidston is well known for its floral prints

Mention the name Cath Kidston and more often than not the mind will drift to the floral prints the brand is famous for.

Long a staple in the UK where there are now 70 stores, the designs have been growing in popularity around the world.

There are more than 130 stores outside of the UK, in diverse locations from Spain to China and Thailand.

Last month the brand announced the first stores in India will open for business this Autumn.

And next on the list is Latin America. The firm has hired Michael Engelhaupt from Under Armour International, the American sports clothing and accessories company, to drive the expansion forward.

Mr Engelhaupt was head of franchise international and has previously worked for sports brand Adidas.

Internet boost

The company says strong online orders sparked the move into Latin America.

"Over time we expect to expand across the region but initially we will be focused on Mexico and Chile because of the inward interest in Cath Kidston coming from those two markets," says chief executive Kenny Wilson.

"Michael will be talking to potential franchise partners and, as we have done in other markets, we are looking to do a combination of standalone stores and concessions.

"We did research as we do before deciding to go into any new market and this said that there was a market in Latin America and interest for fun, cheerful, British products like Cath Kidston. We are very confident in the consumer appeal in Latin America for our products," he adds.

Image copyright Cath Kidston
Image caption There will no doubt be celebrations when the new stores open

Cath Kidston has seen notable overseas growth. Its 2015 full year results showed overall group sales increased by 2.4% to £118.5m, but international retail sales surged by 20.2% hitting £55.3m.

The company is expanding rapidly. Four new stores opened in the UK last year, one in China and 40 franchise stores, including its first Middle East stores.

Japanese buy back

Franchising has proven a successful tool, particularly so in Japan where double digit sales growth over several years led the company to decide in July 2015 to purchase the Japanese Cath Kidston franchise business of 27 shops back from TSI Holdings subsidiary Sanei International.

The agreement brought the stores under the control of the wholly owned subsidiary, Cath Kidston Japan.

"Japan is our biggest international market and a key part of our strategy to globalise the brand," said Mr Wilson at the time.

The brand's continued success comes in spite of the departure of founder Cath Kidston in November 2014, who retains an 11% stake.

Image copyright Cath Kidston
Image caption CEO Kenny Wilson describes the Cath Kidston range as "fun, cheerful, British products"

Ms Kidston has credited her country childhood - she grew up in Hampshire - as the inspiration for her English heritage-inspired brand.

She has however admitted that the floral and polka dot patterns are not to everyone's taste, telling Radio 4's Desert Island Discs in 2011: "People either love it and want a little bit of it very much, or want to stab us."

Katrina Rattu, an analyst at Verdict Retail expects the company to continue to flourish.

"Its product offering translates well into diverse markets owing to its strong visual brand identity. Their expansion is based in emerging markets with a growing middle class with a higher disposable income. They are increasingly looking to buy into aspirational brands such as Cath Kidston with strong British values."

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