US retailers eye EU growth potential Several high-profile US fashion retailers plan to expand their operations in Europe over the coming months in spite of the continent's low growth rates and the eurozone crisis. The US companies, including Jones, Tory Burch and Theory, are seeking geographical diversification that will protect them against a slowdown in their home market as well as in China. IN Luxury 360 "Whilst the Brics and emerging markets offer huge opportunities to luxury brands, the risks can often be far greater than when entering a mature market - hence our expansion in Europe," said Richard Dickson, chief executive of branded business at Jones. Jones, owner of Nine West, Stuart Weitzman and Anne Klein brands, had a limited European presence until two years ago but now has five regional offices. Last June it acquired Europe's largest luxury shoe retailer Kurt Geiger for $352m. Spurred by its European growth strategy, Jones" international retail arm now accounts for 22 per cent of the company's total sales, up from just 6 per cent two years ago. Jones reported revenues of $936m in the first quarter of this year. Whilst Europe is clearly facing significant economic challenges, it remains a huge consumer base with considerable spending power. It is a priority market, particularly now that we own Kurt Geiger," Mr Dickson said. Kurt Geiger gave Jones an established retail network, including control of the 156 shoe departments it owns within Europe's biggest department stores including Selfridges and Harrods in London. Mr Dickson said the decision to expand partly stemmed from the fact that millions of European tourists fly to the US specifically to shop for homegrown brands. American prestige brands attract a cult following in Europe. Given some of our major US labels like Rachel Roy and Stuart Weitzman still have a relatively low profile there, gaining a local foothold and platform to new customers is key. Tory Burch, the US fashion group, recently opened flagship stores in London and Rome, with openings planned in Germany and Turkey next year. Theory, the contemporary apparel brand, also unveiled plans this week to launch stores in France and the UK. "Local economies will inevitably fluctuate, however we have a long term outlook ... hence why Paris and London remain key components to our growth strategy," said Andrew Rosen, Theory chief executive. Some industry analysts question the potential benefits for new entrants expanding into Europe. "The British and European clothing markets are the toughest in the world - there are already too many mouths to feed," said Richard Hyman, strategic adviser for retail at Deloitte. History has shown more failures than successes with foreign retailers here, mainly because brands pay top dollar for prime sites before failing to generate sufficient sales to cover occupancy costs. Any brand needs to seriously evaluate entering the market given the volatile state of the economy.