Global Fashion Brands Targeting South America, Still Avoiding Argentina

Patrick Archer arts & entertainment, competitiveness, foreign investment, franchises, lifestyle, real estate, us companies

Four years removed from the mass exodus of Polo Ralph Lauren, Louis Vuitton and Escada from the streets of Recoleta, global fashion brands are once again targeting major South American metros with the notable exception of BA.

“Foreign Clothing Brands Keep Avoiding Argentina” is the headline of Alfredo Sainz’s excellent piece in La Nacion charting the retail resurgence in neighboring countries and the extended fashion freeze in Argentina’s largest cities and shopping malls.

Across the Andes, Swedish retail giant H&M grossed US$43 million last year with just one location in Santiago’s Costanera Center. Perhaps not surprisingly, H&M just announced it will open three more stores in Chile, while the company’s first Peruvian store opens later this year in Lima’s Jockey Plaza.

Other brands like Banana Republic, Forever 21, GAP, Michael Kors and Victoria’s Secret have Santiago, Bogota, Guayaquil, Lima, Montevideo and Porto Alegre malls in their crosshairs. And luxury brands like Chanel, Dior, Gucci and Prada have blanketed Brazilian boutiques in cities like São Paulo.

The boom of new international brands taking place in the major cities of neighboring countries contrasts with the panorama in Buenos Aires gallerias where, despite very high occupancy levels (IRSA Commercial Properties assured us they have waiting lists for Alto Palermo, Abasto and Avellaneda), in order to find the launch of a major global brand in local malls, you have to go back to May 2008 when the first Starbucks opened in Alto Palermo,” writes Sainz.

“The general feeling shared among business people and retail analysts is that in order to change this trend, we will have to wait until at least 2016 with the arrival of a new government administration which would not only signal the end of exorbitant import tariffs but also trigger improvement in Argentina’s business climate,” Sainz concludes.

“Just as Lima and Bogota became fashionable in recent years, the moment has to arrive for Buenos Aires to receive foreign investors. If H&M can do well in Uruguay or Chile, it will destroy in Argentina. But everything depends on a change in the investment climate and what the outlook is after the (October) elections,” confirms Marcelo Zuliani, a director at Colliers International. (Full Story in Spanish)

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