American retailers revive push into Britain

Best Buy America's largest consumer-electronics chain kicked off the latest rush into the British market in May, when it opened its first-ever U.K. store. The 4,650-sq-m big-box outlet in the London suburb of Thurrock is the first of eight to 10 stores Best Buy expects to open in the country this year.

And it has proved an impressive beachhead: in terms of sales volume, that first weekend was the chain's biggest opening weekend in its 27-year history. "We had strong expectations," says Paul Antoniadis, CEO of Best Buy UK (who won't reveal how much they took in over those first three days). "But the actual delivery was brilliant.

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For some U.S. stores, this will be their first foray into the U.K. Following in Best Buy's footsteps is California-based Forever 21, which specializes in cheap, trendy clothes for young women and will open its first U.K. branch in Birmingham, northern England, in November. But for others, now is the time to expand on past success.

Hollister, which is owned by Abercrombie & Fitch (A&F), has proved extremely popular in Britain since it launched its first surf-shack-chic store in London in 2008. Hollister rode the recession like it was the perfect wave. Despite the economic downturn, it opened 11 more stores across the U.K. over the past two years, most recently in April.

As a result, A&F reports that average sales volume for Hollister's British stores is six times the level of its U.S. stores.

While the invasion is off to strong start, U.S. retailers shouldn't consider Britain a sure thing. U.K. retailing is a highly mature market that's brutally competitive, particularly now as retailers battle to entice credit-crunched shoppers back into shops. "It's probably not a great time [to enter the British market]," says Sarah Peters, an analyst at British retailing consultants Verdict Research, "But I'm not sure if there is ever a good time.

" Indeed, Britain's retailing landscape is littered with the bones of successful U.S. retailers who stumbled badly when they crossed the Atlantic. Limited Brands, in conjunction with British fashion chain Next, failed in an attempt in the 1990s to transplant Bath & Body Works to Britain. And Whole Foods Market, which opened a massive food emporium in London in 2007, lost around $52 million in the British capital last year, thanks in part to formidable competition from mainstream British supermarket chains that are already well stocked with organic groceries.

If this latest flock of U.S. retailers does well in the U.K., it will likely be because they offer British shoppers something completely different. Forever 21, for example, will face resistance from established, strong domestic clothing brands, including Topshop, New Look and Primark. But Best Buy, on the other hand, has an edge.

Not only are its big-box stores a novelty in Britain, but so is the brand's emphasis on customer service. Its Geek Squad unit gives customers round-the-clock technical support, and shoppers can use its in-store setup service to configure gadgets before taking them home. "Consumer-electronics stores in the U.

K. traditionally have not had good reputations for customer service," says Matthew Piner, another Verdict Research analyst. "And no one has really challenged them before."