Cotton On set for South America in international expansion drive

Cotton On Group has confirmed it will head into three new countries this year, with at least five more countries on its radar.

The Geelong-based fast-fashion retailer will stamp its footprint in Brazil, Colombia and Panama, Cotton On spokeswoman Greer McCracken told SmartCompany.

McCracken also says sub-Saharan Africa and mainland China are areas of interest for the group going forward, with no plans confirmed.

The Australian Financial Review reports the retailer is also opening in Vietnam and Venezuela, however, Cotton On could not confirm any details at this time.

The retailer, which offers casual apparel at inexpensive prices for men, women and children, operates around 1334 stores in Australia and overseas, with the AFR reporting approximately 250 more are to open this year.

McCracken says this figure is a “blueprint” but that “things change as it is a fast moving company”.

The brand is already sold in the US, Asia, United Arab Emirates and Germany among other countries.

RetailOasis co-director Nerida Jenkins told SmartCompany the South American market makes sense for Cotton On.

“While the big international brands have identified Australia as a growth opportunity, on the flip side international expansion provides Australian retailers with strong, credible brands access to much larger markets and higher rates of growth than they could ever expect locally,” she says.

“Cotton On has already established a footprint deep into south-east Asia and success there has no doubt provided the platform from which to expand further into developing international markets, where their value fashion offer clearly has strong appeal.”

Retail Doctor Group director Brian Walker thinks it is good news for Australian retail, as he thinks Cotton On has a “model that works”.

Walker says moving into South America is a chance to tap into a huge population, an emerging middle-class and a continent with an increased focus on developing infrastructure such as retail locations.

“All the conditions are right,” she says.

Walker says there will be challenges, such as hiring good local talent, obtaining the right cultural knowledge to do well and getting the brand known in a new territory.

In October 2013, Cotton On acquired Australian young fashion retailer Supre, which at the time of sale had around 157 stores.

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