2024 Look Ahead   //   December 28, 2023

Why 2024 is poised to be the year international apparel brands take over the U.S. market

International brands could be taking over the wardrobes of Americans as soon as next year.

Spanish retailer Mango plans to open approximately 40 stores in the U.S., with the goal of making the U.S. one of its top five markets. Value-based retailer Primark has been expanding its U.S. presence in recent years, but in 2024, it is setting its eyes on opening stores in the southern part of the country. And, Italian lingerie and loungewear brand Intimissimi said that it plans to have 100 stores in the U.S. by 2024. After scaling back its U.S. expansion in 2015 due to low demand for its merchandise, Uniqlo is restarting its North American ambitions with plans to open 20 new stores in the U.S. and Canada in 2024.

As local retailers struggle with slow consumer spending on their own turf, apparel retailers from overseas are looking to open shop. Although American shoppers are pulling back spending on discretionary items like apparel, the U.S. still continues to be an attractive market for international brands looking to scale their businesses. By 2024, more international apparel brands could be taking up spaces in malls and shopping centers across the U.S.

 “​​The U.S. is the world’s largest consumer market, the largest retail market and will remain so for the foreseeable future,” Sky Canaves, senior analyst of retail and e-commerce at Insider Intelligence, said. “There’s a huge and very engaged consumer base and stores are relatively more important in the U.S. than the next largest market.”

Sudip Mazumder, North America retail industry lead for Publicis Sapient, said the U.S. is a much easier market for brands to expand to compared to other major consumer markets like China or Russia. He noted that Russia used to be a growing market for brands to enter but the invasion of Ukraine has essentially caused retailers to turn away.

In China, e-commerce is a fast growing shopping channel and the market is flooded with competition from local companies like Shein and Alibaba. China had also just recently lifted its zero-Covid restrictions this year, which kept borders closed to prevent the virus from spreading. Its strict lockdowns had also kept shopping centers closed, which meant that residents relied heavily on e-commerce as opposed to physical stores.

“Many of them looked at China as an alternative market to get into. That market is also getting flooded with local brands like Shein and others who are doing really well,” he said. “For them, the U.S. is becoming a pretty easy choice to make.”

Though apparel saw slackened demand, there are sign it will rebound in the year to come. Data from Insider Intelligence indicates that apparel and accessories are expected to grow well above other retail categories. Retail sales growth for apparel and accessories are expected to grow 5% in 2024 compared to the total retail sales growth of 3.3%.

Insider Intelligence’s Canaves said that American shoppers have an appetite for the novelty and newness that international brands bring. Athletic retailer Foot Locker said in its recent earnings call in November that Swiss brand On have been attracting new customers to its stores. In June this year, On revealed plans to open stores in more U.S. markets like Chicago, Miami, Portland and Austin. 

Unlike its initial U.S. expansion, Uniqlo now has social media fame. Uniqlo’s $20 shoulder bag has gone viral on TikTok where it generated millions of views for its sleek look, color options and functionality. The bag was even named the hottest product of the quarter by the Lyst Index report earlier this year — a spot luxury brands like Bottega Veneta and Prada had earned in the past.

For overseas brands, the U.S. is a brick-and-mortar shopping paradise. And when they’re looking to expand their presence in the U.S., an increasing number of apparel brands prefer to open their own shops.

“Online has become so competitive and it’s becoming harder to stand out online,” Canaves said. “Owning stores or operating own stores gives them a lot more control over their branding and the customer experience that they provide.”

Already, new stores are generating growth for some of these brands. Primark’s owner Associated British Foods reported in its recent earnings in November that total net sales in the U.S. grew 24% higher than last year “driven by space expansion.” The company opened eight new shops in the period, which are mostly located in the Northeast.

Rebekah Kondrat, founder of consulting firm Rekon Retail, said that many of these overseas apparel brands are also taking up spaces where many local apparel brands are leaving, such as malls. 

For example, last week, Mango announced plans to open a store in Tysons Corner Center in Tysons, Virginia — the largest mall in the area — and Westfield Montgomery in Bethesda, Maryland. In August, Mango also opened its first store in Texas located at Memorial City Mall in West Houston. Primark also took over spaces in malls with some of its newest stores located in Smith Haven Mall in Lake Grove, New York and Concord Mills in Charlotte, North Carolina.

“Malls have built-in traffic,” Kondrat said. “You also have some built in marketing. Most malls have marketing arms and are happy to market their brands that are in their mall.” She added that from an infrastructure standpoint, it is much easier for brands overseas to open stores in malls because it doesn’t require them to set up things like their own HVAC system among other utilities.

When opening U.S. stores, she said apparel brands need to be aware of the shopping preferences and diversity of shoppers in the country. Some brands like Intimissimi have chosen to expand in very specific parts of the U.S. Its store expansions have largely been focused roughly around the coastal areas of the U.S., with stores scattered in states like California, Delaware, New York and Florida.

“We’re very diverse here. New York is going to be very different from Texas,” Kondrat. “They’re going to be different in the way that they think, and so we don’t always respond to the same marketing efforts or product mixes.”