Smiggle is set to open its first UK store next month as the colourful stationery chain sets its sights internationally.
Smiggle has 124 stores in Australia and is now looking to the $2.5 billion British market with the opening of its first store in the UK on February 20 in London’s Westfield Stratford City shopping centre.
The aim is to have 200 Smiggle stores across the UK, with eight to 10 Smiggle stores operating by June this year and between 14 and 20 by November.
The move follows Smiggle’s strong performance in Australia where it achieved sales growth in 2013 of 14.5% and expansion to Singapore where it has 17 stores.
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Smiggle is owned by the Just Group, which is in turn owned by Premier Retail, headed by former David Jones boss Mark McInnes.
McInnes told The Australian Financial Review he believes Smiggle can become a highly profitable global brand.
“We’re not competing with the Zaras of the world,” he said. “There aren’t many global companies that can talk about their target market being nine-year-old girls and boys.”
John Cheston, Smiggle’s general manager, is driving the UK push drawing on his previous experience as an executive with UK retailer Marks and Spencer.
SmartCompany understands Smiggle is attracted to the UK because of Cheston’s personal experience and knowledge of the market, the size of the market and the lack of direct competitors.
While high street chain Paperchase and newsagent WH Smith offer some competition, the Smiggle team believe it has a “unique competitive position” in the market through its focus on children aged eight to ten.
The timing of the start of the school year in the UK in August is another attraction, as it will smooth the earning dynamics of Smiggle’s business.
SmartCompany understands Cheston has received almost 1300 emails from around the world asking to bring the Smiggle brand to different countries, but for the time being is focusing on Smiggle’s existing operations while looking to the UK, Malaysia and other Asian opportunities.
Brian Walker, chief executive of the Retail Doctor Group, told SmartCompany it may be difficult for Smiggle to differentiate itself from the department stores in the UK.
“I think Smiggle is a very successful short-term retailer, but I think it will reach maturity quicker than many other formats so the challenge will be innovating,” he says.
“In comparison, Lorna Jane, which is opening in the United States now, has a very strong philosophy and raison d’être and I don’t get the same sense from Smiggle.”
Walker says Smiggle will also face challenges from the different shopping habits of UK consumers.
“It is very much a high street model in the UK whereas 85% of Australians shop in shopping centres,” he says.