, October 25, 2016

Banana Republic leaves the UK market: what other high street fashion brands can learn about brand positioning

If you are a hardcore high street fashion brand follower, you must have heard the news earlier this month that Banana Republic is about to close eight of its UK stores by the end of this financial year. A spokesperson told the London Evening Standard: “The company anticipates that the majority of the stores will close by the end of fiscal year 2016.”

It’s not surprising to me that Banana Republic has struggled to compete in the UK market. I shop a lot and regularly do market research either for my clients or for academic purposes. Banana Republic is one of a few favourite brands that I often pay my visits to. If you look at their window display and visual merchandising, it feels “premium” if not rather luxurious; but most of the time I’m in the store, most of their products are on sale.

The problem, in my opinion, is how Gap, its owner, positioned the brand far from what it truly should be. The American brand tried to be something it was not. It marketed itself as premium high street designerwear. My research on the brand showed that it inflated its prices to compete with better established brands in UK, while being just another high street brand in the USA.

Of course, when you enter a new foreign market, there are many strategic options to look into and re-positioning your brand is not rare. In fact, it’s a popular option, with Toyota being a successful example in the automotive industry, and in beverages, Fosters and Peroni beer and Californian Gallo wine. The status of being imported can instantly raise positioning, but it’s not always enough to sustain it.

screen-shot-2014-02-03-at-8-56-37-pmHowever, the fashion industry is well known for constant change. Repositioning a brand in the market doesn’t only include increasing prices or “up-marketing” your visual merchandising; it needs to be consistent from the supply chain to how you approach and retain your customers.

UK fashion consumers are lot more savvy and eager for new trends than Banana Republic expected. They are also more fashion conscious than the USA giant anticipated – of course with Arcada, M&S and Inditex dominating the market with robust supply chains, the chance for Banana Republic to succeed was slim. This is an inevitable result and also a good lesson for other brands looking forward to entering the UK or European market in general.

What is the take-away? You need to stay true to your brand promise. And if you want to reposition yourself, make sure you are ready in terms of resources and stay consistent throughout the process.


Thank you Grain!


The Value of Naming