Despite prohibitions, barriers, protectionism, political and economic difficulties and widespread social discrepancies, European and US jeanswear brands recognize the potential of Latin America for their global expansion.

Although many companies have attempted to enter the Latin American markets, Pepe Jeans London was among the first ones to step in and continues to register successful results there.

Pepe Jeans London was among the first ones to step in the Latin American market.
Photo: Pepe Jeans London
Pepe Jeans London was among the first ones to step in the Latin American market.

“We took our first steps in Latin America in the early 1990s starting from Mexico and Panama. Expanding into these regions was pretty natural as local populations share many common values and consumptions behaviors with Europe and, not less important, despite our UK origins, our Madrid headquarters and the regular use of Spanish language helped us establishing an immediate connection with them,” says Xavier Oscina, group international director, Pepe Jeans London.

“Our growth and results are significant in all countries of these areas apart from Venezuela, for obvious political reasons, and Brazil, because of its highly protectionist policy imposing high taxes and customs.”

Today Latin America counts for circa 15% of PJL overall sales, though, and as explained by Oscina, it reaches much higher values in terms of brand equity and penetration.

“We are now working on Brazil as it seems to be the right moment due to positive economic and political progress. Since a few month now, we are moving forward on discussing further with strong local Brazilian fashion companies that are highly interested on partnership with us and hopefully we can enter this market by end 2019. This could bring us much higher results as Brazil–in terms of market volumes–is the major one of Latin America, followed by Mexico, Colombia, Chile and Argentina,” continues Oscina.

“PJL started a new distribution agreement in Colombia in October 2018 in order to accelerate our growth and maximize the potential of our leader position over here. The plan is to open more than 10 new PJL stores in the next five years and be present in more than 150 key multibrand stores all over Colombia.”

Today PJL’s most important market is Mexico, where it opened its own direct subsidiary in 2007. It operates through 20 monobrand stores (including full-price and outlet stores), together with other stores opened in partnership with the prestigious department store Palacio de Hierro, and through more than 150 multibrand stores located all over the country. PJL’s second most important markets are Chile and Peru where it manages about 200 shop-in-shops since 2008, while the third most important are Argentina, Colombia and Ecuador.

 

Replay store in Belo Horizonte
Photo: Replay
Replay store in Belo Horizonte

Growing to the rhythm of Samba

Also Fashion Box, a leading company in the premium denim segment and owner of the Replay brand, is dedicating great attention to Southern American markets and registering a constant growth there.

Despite Brazil’s high protectionism, it has already opened five monobrand stores and two outlet stores between April 2017 and December 2018 there.

Replay Jeans do Brasil, the company through which Fashion Box operates, acts through the wholesale channel and distributes Replay to 200 multibrand stores. Matteo Sinigaglia, president of Fashion Box, says: “I am satisfied about Replay products’ great acceptance in the Brazilian market. In addition to the present three stores we opened in Sao Paolo, one store in Belo Horizonte and one in Curitiba, we will open five more stores by 2022.”

Also Colombia plays an important role for Replay as, in addition to the two monobrand stores in Bogota and Medellin inaugurated at the end of 2018, it will open five more stores by 2022. In addition, it already operates through various multibrand stores collaborating with high-end key accounts in strategic cities.

Replay wants to further expand in this area by growing in Paraguay, a market where the brand is already sold through a store in Asuncion and a shop-in-shop in the Ciudad del Este department store.

 

Guess has chosen Latin Grammy Award winner music star J Balvin for its new ss'19 campaign.
Photo: Guess
Guess has chosen Latin Grammy Award winner music star J Balvin for its new ss'19 campaign.

How to survive in a jungle of brands

Attracting Latin American consumers is easy and hard at the same time. Central and Southern America have different cultures, taste, climates, according to PJL’s Oscina. For instance, Brazilian have an incredible passion for bright colors, and have special requests in terms of fits as their body types are very particular.

Though all consumers love jeans and branded products deeply.

Generally they all share a great culture for jeans and denim and know much about fabrics and treatments as the local industry is very active and a myriad of brands exists there. Each country has locally made brands offered at a very profitable price-quality ratio and are very keen on products’ quality and care. “One of the biggest challenges in Latin America is the high number of local brands and competitors which are doing a great job since many years. As these brands are offering bespoke products to local consumers they have become very prepared and demanding–and nowadays we all know that the consumer is at the center of everything,” says Oscina.

“Our PJL brand is perceived as a premium brand–higher than how it is perceived in Europe, for instance. Not everyone can afford them as we sell a pair of jeans at €90 or €100 at retail, a high price for a market where average monthly salaries is lower than in Europe and where local brands sell very well done jeans for about €50. For this reason, succeeding here is very challenging as one has to take into consideration all these aspects: you have to be consumer-centric while constantly offering great brand experience, digital strategy and new trendy products in partnership with great local retail and supplier partners."

 

Sanctuary has recently started expanding in the denim segment and started approaching Southern America by stepping into Mexico.
Photo: Sanctuary
Sanctuary has recently started expanding in the denim segment and started approaching Southern America by stepping into Mexico.

How to start a “Spanglish” business

Although some brands are already working for long time in this market there is always space for newcomers. LA fashion brand Sanctuary has recently started expanding in the denim segment and started approaching Southern America by stepping into Mexico. It has just started a successful partnership with the El Palacio de Hierro Mexican department store chain and opened seven shops with it.

In October 2018, Sanctuary hosted an event to celebrate its official international launch with Palacio. It featured a special shopping experience for attendees to purchase the latest fall collection. Sanctuary worked in partnership with Mexican artist Minerva GM for the launch and she did live paintings for guests who shared their experience via social media.

The design she created was also printed on exclusive T-shirts that each guest received when they made a purchase at the event. At the same time, Sanctuary donated 20% of every dollar earned at the event to local charity Impacto Textile Program which benefits women artisans from indigenous cities throughout Mexico.

 

What are Latin American consumers like?

As previously explained size and fit requests are not the same ones for each country. “Our demographic involves various sizes (short, tall, slim, curvy and similar ones) so we cannot speak to fit for a specific girl. We are proud to say we do not fit one box,” explains Debra Polanco, chief creative officer, Sanctuary. “Regarding taste, it changes in every region also because climate is also playing quite some difference in the way our customer shops.”

When choosing what to buy they mostly follow impulse. “We are seeing higher sales through special unique items we offer and also love to buy if there is a promotion or in-store event that creates more of a customer experience,” explains Andrea Maria Mora-Jensen Garza from El Palacio de Hierro.

Definitely consumers are very brand-oriented in these countries, but they are slowly getting more product-educated as they are starting to analyze quality versus price always more. They love to buy mainly single pieces, but mannequins usually help selling the total look when browsing in-store,” continues Mora-Jensen Garza.

 

Offering the right mix

In terms of product selection, European and US brands offer vast collections that include in part items from the mother company’s main collection and in part produced locally pieces. “You must adapt when serving these countries,” explains PJL’s Oscina. “In fact each of them has very specific fit and silhouette requests. Moreover, as the local market is rich with very good quality products, one has to be able in offering the trendiest pieces produced according to very profitable price-quality ratio. For this you have to keep both product types bearing in mind the emotional relation between a local consumer and an appealing global brand’s offer.”

Replay also produces part of the collections directly in Colombia and Brazil, but only for some very basic products and only after approval from the mother company. All the rest of what is sold across the ocean comes from the Italian headquarters. Especially exclusive projects like the Hyperflex and Touch selections come from the Italian company. In other countries such as Paraguay they only sell products coming from Italy.

 

Choosing the right face

When it comes to marketing and communication with the final consumer it also has to be handled accurately. For instance, to become more successful within the Latin-American community in North America as well as in Southern American markets Guess has chosen Latin Grammy Award winner music star J Balvin. Nicolai Marciano, director of brand partnerships for Guess Inc and Guess Jeans USA, says: “Since J Balvin is one of the most popular artists worldwide and since Guess has many fans in Latin America I knew this would be a perfect partnership. By this means we can extend our worldwide selling platform and create a connection that goes beyond music only.”

Also Replay’s long-time partnership with Paris Saint-Germain’s champion and captain of the Brazilian national team, Neymar Jr., continues to be fruitful. Replay recently renewed a contract that has had him serve as a brand spokesperson since 2015 and will tie the player to the company until August 2021. While Neymar Jr. continues to wear Replay-branded clothes in his free time he can grab the attention of Latin American consumers, but not only from them.



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