Shopping Centers Today

NOV 2018

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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22 S C T / N O V E M B E R 2 0 1 8 S T O R E F R O N T S Retail shepherd HiO helps newbie merchants face the perils of opening their first stores By Anna Robaton D espite its shiing retail landscape, the U.S. remains one of the world's largest and most-coveted consumer markets. It is also one that many foreign brands opt to pass over, because setting up shop in the U.S. can be a risky business. Now a group of veteran retail executives has come up with a brick-and-mortar concept called HiO, which o•ers a stepping-stone for established foreign brands that want to enter the U.S. market without going it alone. HiO (pronounced "hi-oh") is also a platform for e-commerce brands that want to venture into the brick-and- mortar arena. In late August Direct Brands Group — among whose founders are David Zoba, former global real estate head at Gap Inc.; and Larry Meyer, a former executive at Uniqlo and Forever 21 — opened its first fully designed store, at Acadia Realty Trust's City Point, in Brooklyn, N.Y. The store offers a mix of eight international brands, seven of which are new to the U.S. Direct Brands, a specialist in helping international and e-commerce brands establish themselves in North America, introduced the HiO concept in Toronto — where the firm has operated pop-up, multibrand "gifting" stores at Cadillac Fairview's Toronto Eaton Centre and Sherway Gardens. These pop-up stores operated out of already built-out retail spaces (and one of the stores remains open), but the store in Brooklyn is HiO's first full design of its own space. Direct Brands also had a HiO pop-up store at Simon's Roosevelt Field mall, in Garden City, N.Y. That store was housed in a space called The Edit, which is used to showcase new design- ers, products and ideas. "Our mission is to provide con- sumers with exciting new choices by showcasing proven international brands," said Zoba. "Brands can see how they resonate in the United States without investing $30 million." Zoba knows very well the chal- lenges that retail brands face when entering new markets. As Gap Inc.'s global real estate head, he helped over- see the rollout of Gap stores in China and Italy, and of Old Navy stores in Mexico, along with the openings of about 100 Athleta stores in the U.S. For the past three years, Zoba has been chairman of the JLL global retail leasing board. In that role, his respon- sibilities include advising retail clients on cross-border expansion. Many international retailers have cold feet when it comes to entering the U.S., and for good reason, Zoba observes. H&M and Zara, to name two, have been successful here, but that has taken a long time and has cost a lot of money. Others have entered the market with high hopes, only to struggle and, ultimately, in some cases, to give up. Foreign brands stand a better chance by forming partnerships with local entities that have market knowledge and connections — as U.S. retailers often do when they expand abroad, Zoba says. Many international brands "know the United States is the number-one market in the world, but they, for various reasons, fear entering the market," said Zoba. "We want to be the dominant partner of choice for international brands that want to come to the United States." The industry veterans at Direct Brands also include Sever Garcia, who is CEO, and Herbert Kleinberger, the firm's chief information officer. Kleinberger is a longtime retail indus- try consultant and adjunct professor at NYU's Stern School of Business. Garcia, a native of Spain, is also founder and CEO of SGN Group, which has helped many foreign brands get their products into U.S. department stores. SGN is also an operating partner in Direct Brands. For the HiO platform, Direct Brands has built "a library" of some 300 international brands and engaged HiO CityPoint, Broooklyn, N.Y.

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