Name: How International Brands Like Primark, Uniqlo And Mango Won Over America
Uploaded: 2025-03-05T11:27:34.000Z
Duration: 14 min 1 s
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Brands like Uniqlo, Mango, Primark, and Aritzia are expanding rapidly in the United States.

Inditex, which owns Zara, Fast Retailing that owns Uniqlo, other names such as Mango and Primark, they've expanded a great deal internationally, particularly in Europe and other areas.

And the U.S. is still an underpenetrated, undertapped market for them.

These are also retailers that have a great deal of international expertise.

From 2018 to 2023, there were nearly 19,000 U.S. store openings.

About 30% of those were foreign-owned companies.

The rise of foreign retailers is especially prevalent in American shopping malls.

I just walked into Queen Center in New York, and the first thing I see is a Primark, which is next to a Zara, which is right across from an H&M.

The U.S. is the number one consumer market, so to be here and to get it right means a lot.

It looks very similar to that, but this is a lot less expensive.

Primark is still a very new player, but it could pose competitive threats for mall names that people are more familiar with.

He was looking for a pair of sneakers and brought a coupon to go to Macy's.

But he ended up going into Primark, walking out with a $22 pair of shoes, and he never made it to the department store.

So what makes the U.S. so appealing to these foreign brands?

Primark opened its first store in Dublin back in 1969, where it is known as Penny's, a nod to the store's distinguishingly low prices.

The Irish discount retailer has grown its presence in the United States to 29 stores.

If you spend time in Ireland, our home market, or the U.K., where we've been since the early 1970s, Primark is an absolute household name.

We still have growth opportunities in Europe, but of course, some of our countries are certainly at a maturity point.

And what we saw very quickly was a customer base that was responding incredibly well.

Primark has no e-commerce business in the U.S., and it relies on large brick-and-mortar stores like this one in Queens, New York, which is 37,000 square feet of retail space.

One of the reasons why Primark has been slow to expand online is because e-commerce is very expensive.

It's a lot cheaper to have shoppers come to the store and take home what they buy.

And so to keep margins up and prices low, their business model depends on being very efficient.

But Primark is just one name amongst many focused on U.S. growth.

Spanish retailer Mango and Canadian fashion brand Aritzia both made a splash in 2024.

Mango grew its U.S. sales by 10 percent and announced a $70 million expansion plan.

Aritzia's stock price has soared over the past year as it grew U.S. revenue by 9 percent in fiscal 2024.

While these brands are currently in the midst of expansion, H&M laid the groundwork years ago for many of these names now taking on the U.S. market.

It opened its first store about 25 years ago on New York's Fifth Avenue.

And since then, it's become a bit of a mall staple.

It has about 500 stores across the country, and it's become a household name similar to a Gap or an Old Navy.

Now it's fallen on trickier times because it's facing new competition from Shein, from Timu, from a lot of other specialty retailers that have cornered the market and come in and competed on fashion-forward trends.

Zara is another name that was at the forefront of global retailers moving to the U.S.

However, the brand has grown its store base far more slowly than H&M.

In fact, its net U.S. store count has remained about the same over the past five years.

But just looking at the number of stores doesn't tell the full story here.

They'll be expanding into these bigger flagship locations.

And then those smaller stores that were existing in a given city, they might be actually closing them.

And net, the density of that space continues to increase every year.

I think what's interesting about a lot of these apparel retailers moving into the U.S. is that they have something very distinctive, whether it's Inditex, which owns Zara with fast fashion, whether it's Mango with its kind of European style, Primark with its mix of ultra-low prices and fast fashion, and Uniqlo, which has a focus on functional products, technical development.

They all have something pretty distinctive, which I think is an advantage over kind of mid-range, undifferentiated apparel retailers.

More than 50 percent of Primark's offering is basics.

Think T-shirts, underwear, socks, you know, stuff that isn't going out of style.

H&M is more fashion focused, but similarly manufactures products far in advance in mainly China and Bangladesh, relying on its designers to predict trends and styles long before they hit stores.

Rather than trying to predict trends, Zara, on the other hand, responds to them, operating under a traditional fast fashion model.

Therefore, Zara is less reliant on manufacturing in Asia than some of its peers.

About half of its production is done through nearshoring.

All that means is the company produces things close to where it sells them.

Inditex is based in Spain and nearly 40 percent of its factories are based in Europe.

It's therefore able to quickly stock product in the continent.

But to get clothing on U.S. shelves, while it's still in style, requires a different approach.

Often a lot of the U.S. product needs to be flown out there rather than shipped, right, to get there quickly enough.

Air freight is much more expensive than sending something on a ship.

As a result of that and differences in duties, taxes, you know, costs of employment, rental costs, etc., the price points of items in the U.S. for Zara are about 25 to 35 percent more expensive than the price points for those same items in its European business outside of Spain.

But whereas when you look at H&M, the price points are very similar across most of its major markets.

So you won't find a major discrepancy in prices in Europe versus the U.S.

The U.S. retail market is highly fragmented, meaning there are a lot of companies vying for share of the customer's wallet.

Companies like Aritzia and Mango see fresh turf when they look over at the U.S. and they see a more resilient shopper.

A lot of consumers in Europe, particularly in the U.K., are under more economic pressure.

In the U.S., there's been a more resilient consumer and that consumer is willing to try new brands and follow global trends.

While that means increased competition, it also means new opportunities for growth.

That dynamic is different in countries like Spain, where players like Inditex already control a significant portion of the retail landscape.

They genuinely have an over 20 percent market share.

So, you know, if they're expanding in Spain, Zara, for instance, you really do feel that they're probably taking share from other players.

When I look at Euromonitor data for Inditex's market share across the Americas, so North America and it will include South America as well, it's like one and a half percent.

And H&M's won't be dramatically different.

For context, if I look back a decade before, it was sort of 0.8 percent.

So it's not that they are taking a little bit of share with their market rollout, but it's not really significant enough for me to see it as, you know, that taking material share in the U.S. from other established players.

One of the opportunities that these companies have seen in the U.S. is that department stores have weakened.

This is not a news story, but as Macy's closes about 150 of its namesake stores, not only is that leaving a big box in malls that in some cases Primark could move into, but it's also leaving some market share on the table that's free for the taking.

Another dynamic that could be appealing is the decline of baby and children's stores.

Babies R Us and Bye Bye Baby, which is owned by Bed Bath & Beyond, both went out of business.

And that means that Primark sees opportunity to grow its baby and children's market, which it's been doing at many of its stores.

CF Leisure is really big right now with brands like Lululemon, Biore, Aloe really taking off.

This is Primark's answer to that, the $7 workout T-shirt.

We've been able to influence back on that global Primark product range to include more leisure wearers.

We are about 5 percent of Primark's global sales today.

So still relatively small in comparison to the other 16 countries in Europe.

But actually, because of that growth, we're now able to shape more of the product range to suit the U.S. consumer.

Social media has allowed brands with even a relatively small number of physical stores to flourish in the U.S.

A Forrester retail survey found that 63 percent of consumers under 25 and 57 percent of those between 25 and 34 discover products or brands on social media at least weekly.

Take the Uniqlo shoulder bag, for example.

Both companies cited social media virality as driving growth for these products in 2023.

But one viral product does not keep a brand afloat.

What it does create is brand awareness, which these companies can capitalize on by continuing to stay on top of trends.

Part of the appeal of these brands, whether it's Mango or Zara, is that they have a lot of off-the-runway looks.