This week, a look at the fashion brands who are opening stores and moving their manufacturing to Mexico thanks to a growing economy and favorable retail conditions. Scroll down to use Glossy+ Comments, giving the Glossy+ community the opportunity to join discussions around industry topics.
When luxury British footwear brand Kurt Geiger decided to open its first stores in North America last year, it didn’t opt for the U.S. or even Canada. Instead, it opened three stores in October in Mexico.
Speaking on the Glossy Podcast in August, CEO Neil Clifford sang the praises of Mexico, and Mexico City in particular, calling it “Los Angeles meets Paris with a bit of Morocco sprinkled in.” And at the National Retail Federation’s Big Show earlier this month, Levi’s president Michelle Gass similarly praised Mexico as an excellent market for the brand.
“Mexico is actually where we have our strongest brand equity in the world,” Gass said. She cited other regions and cities like Shanghai, Thailand and India as emerging markets, but singled out Mexico as where the company is particularly focused on expansion. “Latin America and Mexico are huge growth opportunities for us.”
Kurt Geiger and Levi’s are just two of the fashion brands that are recognizing the growth potential of Latin America as a retail market. The region is expected to grow as a retail market — where consumers spent more than $964 billion in 2022 — by around 9% annually over the next four years. The French government agency Business France Mexico reported that Mexico, in particular, will see its fashion market grow by 74% and its luxury market grow by 106% by 2025. Brands including Steve Madden, Shein, Claire’s and The North Face have all opened stores, facilities and factories throughout Latin America in the last year.
The jewelry brand Kendra Scott made its debut in Mexico last year through a partnership with Liverpool, a historic department store in Mexico City that Kendra Scott CEO Tom Nolan said is “as familiar to people in Mexico City as Selfridges is to people in London.” Kendra Scott gets 15% of its $500 million revenue from wholesale, and it’s leaning into international expansion in markets like Mexico to fuel its growth.
“It’s proven now that a customer exists there for us,” Nolan said on the Glossy Podcast in July. “The way we want to enter an international market is through wholesale partners, which is the same way we started here in the U.S. Customers in Mexico City are comfortable with the brands that they associate with Liverpool, which creates a lower barrier to entry.”
Other brands have approached Mexico on their own without wholesale partners. Among them is Claire’s, which opened a 1,200-square-foot flagship store in Mexico City in December of last year. Swedish fast-fashion brand Cos did the same in September. And when brands aren’t opening stores there, elements of Mexican tradition and aesthetics are working their way into fashion around the world. Dior incorporated elements of traditional Mexican pepenado embroidery techniques, working with artisans from Mexico, into its Cruise 2024 collection.
Steve Madden’s chief information officer, Oz Saar, said Mexico is a particular area of focus for the brand right now. It opened 20 stores last year, several of them in Mexico and mostly at full price. Around 25% of its stores are outlets, but it’s now focusing on full-price stores in the U.S. and abroad.
“We have our own retail business and we have about 37 stores in Mexico now,” Saar said. Steve Madden has over 220 stores globally, around half of which are in the U.S. “We’ve been growing in Mexico for about a year now.”
Ray Ertzo, vp of North American retail at Cole Haan, said part of the company’s three-year growth strategy is store expansion internationally. While the brand is opening multiple stores in Toronto this year, south of the border will also be a focus. Cole Haan already has nearly 100 stores across Latin America with an undisclosed additional number of stores planned to open in the next three years.
“South America is a big area for us,” he said. “It’s a very fashion-forward customer.”
These brands are responding to recent growth in the Mexican market. At the end of 2023, Mexico’s economy expanded for the eight consecutive quarter, according to the Banco de Mexico. The country’s GDP has continued to grow at a rate of around 3.5% for two years, and there’s been sustained 4.5% retail sales growth in the same timeline as well.
It’s not just the Mexican customer that’s valuable right now, it’s also the Mexican labor force. Some brands like Shein and Steve Madden have chosen to move their manufacturing to Mexico thanks to the low labor costs and proximity to the U.S., for example. But the market isn’t without its risks, including a sometimes unpredictable regulatory landscape in which labor laws can quickly change.
Still, analysts say the growing purchasing power of the Mexican consumer is worth the investment.
“Mexico has been a real bright spot globally and has a very, very powerful population,” Sarah Willersdorf, head of luxury at the Boston Consulting Group, told Glossy in April.