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Joe Fresh fashion shot (J.P. Moczulski/J.P. Moczulski / CP)
Joe Fresh fashion shot (J.P. Moczulski/J.P. Moczulski / CP)

Joe Fresh's global expansion plan: first, he takes Manhattan Add to ...

For Joe Mimran, the creative force behind Joe Fresh Style fashions, launching stores in the Big Apple is a bittersweet return to New York City retailing.

As co-founder of Canadian clothier Club Monaco more than two decades ago, he boldly rolled out a store in 1995 on New York's high-profile Fifth Avenue. His Club Monaco operation so impressed fashion powerhouse Polo Ralph Lauren of New York that it snapped up the chain in 1999 - and within a year or so pushed out Mr. Mimran.

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Today, he is returning with plans to test the first four Joe Fresh stores in New York this fall, including a flagship on Fifth Avenue several blocks from Club Monaco. In his latest U.S. foray, he envisions the potential for as many as 800 Joe Fresh outlets in the U.S. within five years, as well as expansion beyond North America, he said in an interview on Wednesday.

"I cut my teeth on Fifth Avenue with a value-driven style concept - Club Monaco," he said, hours after grocer Loblaw Cos. Ltd., which owns the Joe Fresh brand, unveiled the New York pilot. "It was the best store in our system … [Now I'm]coming back to New York. It's coming back in a re-energized and a reinvented way."

It is not, however, a venture without risk for Mr. Mimran or for Loblaw, which is counting on Joe Fresh to help drive profits at a time when its core grocery business is getting more competitive. A long list of Canadian retailers, including such high-profile players as Canadian Tire and Future Shop, have failed in setting up shop south of the border. Loblaw itself was forced to retreat from the U.S. market after years of struggling with stores it owned in St. Louis and New Orleans, and in 2008 it ended a less-ambitious scheme to sell its President's Choice products in other U.S. supermarkets.

But Mr. Mimran is betting that he will follow in the footsteps of the likes of yoga-wear specialist Lululemon Athletica, which now has more stores in the U.S. than in Canada.

Mr. Mimran has made big strides since those days in 2000 when he was ousted from Club Monaco by its New York parent. He's enjoyed a style-setter's comeback by designing private labels for Toronto-based Holt Renfrew and Loblaw, both controlled by the wealthy Galen Weston family. By 2006, he had made another bold move by launching his cheap-chic Joe Fresh in Loblaw superstores, for the first time putting his name on his label.

The label has become a top performer for Loblaw, on its way to hitting $1-billion in annual sales. Now, just as Loblaw faces more heated competition with the arrival of U.S. discounter Target Corp. by 2013, Mr. Mimran is taking another gamble, perhaps his biggest to date, by taking on one of the world's most cutthroat fashion cities with a supermarket brand.

"That's a pretty audacious move," said Neil Stern, senior partner at retail consultancy McMillan Doolittle LLP in Chicago. "It's a very crowded market … But certainly he has a track record."

Having launched Joe Fresh initially with men's and women's clothing, Mr. Mimran branched out into children's wear, lingerie, shoes, handbags, jewellery and beauty items in the past five years. By last fall, he opened the first Joe Fresh standalone store in Vancouver, with 20 planned in Canada over the next year or so.

Despite those accomplishments, Mr. Mimran's latest expansion may be an ill-timed diversion at a time when he needs to focus on his core Canadian business, said Randy Harris, president of market researcher Trendex North America in Toledo, Ohio.

"They run the risk of taking their eye off the ball," Mr. Harris said. "They should stay in Canada and concentrate on that."

Since Mr. Mimran last launched stores in New York in the 1990s, the competitive landscape has been transformed by new low-cost fast-fashion players, Mr. Harris said. They include H&M of Sweden, Zara of Spain and U.S.-based Forever 21. These retailers race to develop new designs and ship them to stores, keeping costs low with their ever-growing economies of scale. H&M, for instance, has more than 2,200 stores in 38 markets.

Mr. Mimran faces the added challenge of spreading the word about his Joe Fresh line, which is far from a household name in New York (although familiar among the fashion-aware). In Canada, he has the benefit of stocking the fashions in a leading grocery chain. But he has yet to establish his name as a standalone operator, Mr. Harris said.

At the same time, Allan Leighton, president of Loblaw, struck a cautious note about the New York foray. "It's very much a pilot."

Mr. Mimran said he has already taken on the same global competitors in Canada, such as H&M and Zara. "We compete with international brands in our own market," he said. "Today, if you have a proposition that resonates, it can work across cultures and borders."

He will tap into the same marketing tactics that helped power his brand in Canada, including television, magazine and public relations campaigns, he said.

And he said he feels he is ready for international competition, and is already considering expanding beyond North America to Europe and Asia. "That's always been the conundrum for Canadian brands," he said. "No matter how big you become in Canada, you're not really, truly recognized until you step outside of that market and start to expand."

Follow on Twitter: @MarinaStrauss

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