Seafolly eyes China in global expansion
Armed with a mandate to pursue global growth, Seafolly’s new chief executive Paul Kotrba is eyeing expansion into China to further build on the Aussie swimwear brand’s international business, less than a month after opening its first retail store in Europe.
The former LVMH executive has been busy since joining the 43-year-old business in January, overseeing the final stages of an e-commerce relaunch and bedding down a deal for a flagship store in France’s renowned Rue D’antibes shopping precinct in Cannes.
But now the retail veteran is looking east to untapped potential in the world’s most populous market, in what could be Seafolly’s first significant step in Asia since launching retail stores in Singapore eight years ago.
“We’re looking at China really closely,” Kotrba told Inside Retail. “For cultural reasons and preference, the [swimwear] category doesn’t have a big footprint … you don’t see a standalone global swim fashion house trading in the market.”
Kotrba is no stranger to China, having overseen DKNY’s expanding presence in Asia during his time with LVMH, an experience that’s left him both bullish and cautious on the notoriously fickle market.
“We want to be very methodical and careful,” Kotrba explained. “It’s super competitive and the Asian customer is more educated than most customers around the world … you really need to put your right foot through the door.”
The swimwear brand, which now sources as much as 45 per cent of its annual revenue outside of Australia, already has three stores in Singapore and has been learning and adjusting its Asian offer for some time.
Kotrba was tight lipped on specifics but has come to the company looking to drive the international part of its business at a time when the Australian retail sector has come under pressure.
Australia is still Seafolly’s largest market with 23 stores but a subdued outlook for discretionary retailers is dictating caution.
“We’re optimising our footprint. I’m not sure we’ll be growing it by significant numbers,” Kotrba said of the company’s local retail presence.
European pop-ups in the pipeline
Instead, alongside Asia, Europe has been earmarked for retail growth. With an initial store in France now up and running Kotrba said Seafolly will look to pursue pop-up stores throughout the continent over the European summer.
“If you’ve spent a summer in Europe you’re familiar with the places that the majority of people go in July and August [such as Mykonos, Greece] … having a short-term presence in some of those key locals is something we’re looking into.”
Europe, predominately through an extensive wholesale network and concessions in French and British department stores, currently accounts for 20 per cent of Seafolly’s total revenue, with France growing by 46 per cent y/y in 2017.
The strategy is to test the waters – literally – with pop-up stores, which will then inform decisions about where to establish more permeant operations throughout the Euro zone.
Kotrba did not say whether Seafolly had a store target for Europe in mind, but the business will proceed with caution in light of the disruption plaguing bricks-and-mortar retail globally.”
“We don’t want to open flagships indiscriminately … everyone is coming to grips with the challenging landscape,” he said.
Seafolly also recently launched new e-commerce platforms in Australia the US and Singapore, introducing a new interface and a variety of new functions.