Barbiemania has gripped the world’s attention. Consumers have flocked to cinemas, embracing the Barbie brand following the much-anticipated release of Barbie on 21 July 2023. Since its premiere, the film has made Greta Gerwig the highest-grossing female director of a live-action film, with box office sales reaching over US $1.2 billion as of 19 August 2023.
Mattel, which has owned the Barbie brand since the popular doll was first released in 1959, secured over 100 brand partnership deals in the lead up to the film’s premiere, across sectors from nail polish to gaming consoles and holiday accommodation, as well as more traditional merchandise like clothing. 'I don’t think we’ve ever seen this many brand partnerships coming out of one film', noted Jo Ashdown, managing partner of brand partnership agency Mando-Connect.
Primark teamed up with Mattel to launch a ‘Barbie The Movie’ collection. The international retailer now sells an extensive Barbie-inspired collection ranging from clothing to homeware and beauty products. As part of Primark’s mission to offer high quality fashion at affordable prices, the collection is reasonably priced, ranging from £3 to £20. Italian footwear company Superga has designed a range of Barbie-themed shoes, while for two weeks in July, Selfridges opened a Barbie pop-up, where customers could buy or rent Barbie-themed clothes and book Barbie-themed cosmetic treatments. Zara also capitalised on Barbiemania, launching Barbie clothing collections for children, men and women in its stores last month.
Can Barbie save Gap, however? Wells Fargo analysts recently described Gap Inc (parent company of Gap, Old Navy and Banana Republic) as ‘near-directionless’, given falling sales and disappointing results across its portfolio. Following these struggles, Gap partnered with Mattel for its ‘Gap x Barbie’ collection, featuring Barbie branding along with Gap’s signature typeface on items ranging from t-shirts, hoodies and accessories to pet apparel. Like other brand partnerships, Gap may be counting on leveraging the Barbie fanbase to help connect with Gen-Z. This generation is currently the largest, making up 25% of the global population, and has a purchasing power of US $360 billion in the US alone. Whilst Barbie has made some unexpected partnerships, perhaps she will help save Gap, along with its newly appointed president and CEO, Richard Dickson – coincidentally the same man who revived Barbie in his previous role as Mattel’s CEO.
Retailers are not the only ones cashing in. Barbiemania has even reached the hotel industry. The Hilton and Hyatt hotels are now offering Barbie-themed hotel suites in Bogota and Kuala Lumpur respectively. Airbnb is also offering the opportunity for two guests to stay at Barbie’s ‘Malibu Dream House’, hosted by Ken.
A number of retailers are beginning to see their recent international expansion drives pay off. Earlier this month, AllSaints published its audited results, revealing ‘record’ revenues and a 182% increase in profits for the 12 months to 28 January 2023. The figures were partly attributed to the retailer’s international expansion in Asia, following store openings in mainland China, Taiwan and South Korea.
Finnish clothing and lifestyle brand Marimekko is similarly pursuing expansion in Asia with plans to open in two new markets; Vietnam and Malaysia. The expansion forms part of Marimekko’s wider international expansion strategy, with Asia cited as its ‘most important geographical area’. New York-based streetwear label Supreme also opened its first store in South Korea earlier this month, marking its third Asian market after China and Japan.
Meanwhile, Spanish fashion company Mango has landed in Texas. Last year, the retailer opened its flagship US store in New York, and has plans to open 15 new locations in the western and southern states in 2023, reaching 40 stores across the whole of the US by 2024. Mango reported high growth in the first half of 2023, with turnover of €1.451 billion and a strong performance in key international markets.
Such focus on expansion in Asia and the US is perhaps not surprising: McKinsey reports that the luxury sector is expected to grow between 5 and 10% in 2023, driven largely by China (projected to grow between 9 and 14%) and the US (projected to grow between 5 and 10%). China and the US are also expected to outperform Europe in the fashion market (excluding the luxury sector).
Meanwhile, British luxury accessory brand Mulberry has reported that, whilst its UK retail sales results remain stagnant, it has seen a 46% increase in its international sales in the first quarter of the new financial year, with an impressive performance by its newly acquired stores in Sweden and Australia.
Wilko has this month announced the appointment of an administrator. The retailer, founded in 1930 as a single hardware shop in Leicester, is family run and has over 400 stores and 12,500 employees across the UK. Once a fixture on the high street synonymous with discount shopping, it has experienced significant financial difficulties following the Covid-19 pandemic: sales fell by 10.5% to £1.28 billion in the year to 31 January 2021, and pre-tax profits dropped by 13% to £5.5 million due to a reported 40% fall in high street visitors. In January 2022, Wilko announced the closure of up to 15 stores and sold its distribution centre in Nottinghamshire to raise £48 million, however plans for over 400 redundancies were still reported in February 2023.
In an open letter issued on 10 August 2023, Mark Jackson, Wilko’s CEO, confirmed that the business had ‘no choice but to take the difficult decision to enter into administration’. Although they had ‘left no stone unturned’, including a new chair, senior team and attempts to improve the digital customer experience, the struggling retailer could not be rescued.
PwC has been appointed as administrator and noted the ‘incredibly challenging trading conditions’ facing the Wilko group, as well as the ‘impact of the cost of living crisis’. As of 29 August 2023, PwC is said to be reviewing a £90 million rescue bid from private equity firm M2 Capital, which follows an earlier offer from the owner of HMV, Doug Putman. It is understood that both bids are structured to keep Wilko trading, and M2 Capital managing director, Robert Mantse, has said that if the firm’s offer was accepted, M2 would ‘guarantee all employees’ jobs for two years’.
Support for fashion and retail was largely ignored in the Spring Budget when the chancellor failed to re-introduce tax-free shopping for international spenders, and recent results seem to be proving critics right. Visitors from the US have shunned the UK as a destination for shopping in favour of European cities – new data shows that US tourist spend in London's West End has decreased by 1%, but rocketed to 183% in France and 174% in Spain over the same period, despite flight bookings from the US rising by 17%. The same trend is true for visitors from the Gulf. Similar data has shown that the lack of tax-free shopping is costing the UK £10.7 billion in lost GDP and deterring two million visitors a year.
Dee Corsi, chief executive of The New West End Company, commented that the figures ‘should set alarm bells ringing in Westminster’ and Jigsaw boss, Beth Butterwick, similarly described Britain now as the ‘black sheep’ of Europe, with London lagging behind other luxury hotspots such as Paris, Madrid and Milan. Pandora's UK boss, Rasmus Brix, reiterated that scrapping the tourist tax and allowing international shoppers to receive 20% back on their purchases would help offset challenges facing struggling high streets, and the ongoing impact of the cost of living crisis, gloomy weather and train strikes. British luxury organisation Walpole is similarly urging its members to continue campaigning on this topic.
Meanwhile, profits at Harrods have risen almost tenfold, with sales increasing by 52% to £994 million in the year to January 2023. Interestingly, the Knightsbridge store in part attributed its increase in trade to the return of overseas customers post-pandemic, as well as its ‘longstanding relationships with both brands and loyal customers’. Harrods has outperformed its rivals but as an iconic department store with a rich history, it may perhaps be an anomaly.