J.Crew Goes Global via Net-a-Porter

This week, American retailer J.Crew announced that come May, it will begin global distribution via a partnership with Net-a-Porter, a luxury e-commerce site. Prior to that, J.Crew has been available only in the U.S. and Japan; now, as the company jumps the line to the wholesale side with the platform of Net-a-Porter, consumers in 170 countries around the world can now shop J.Crew. The site will not only feature Net-a-Porter's buyers' picks from J.Crew's collection, but also an array of exclusives designed just for the site. Net-a-Porter founder Natalie Messenet said of the deal, "The days of geographical barriers are over. Consumers are seeing J.Crew in all the fashion magazines mixed in with designer labels."

When I read the headline, I was beaming. It's a truly brilliant business partnership. Many people do not realize how difficult global distribution is to achieve. The expenses involved are countless -- PPE expenses for distribution centers, shipping costs and duties, cost of labor, etc. It may not make sense for a company to invest the money to extend their distribution beyond its native country -- the business potential overseas might not be enough to allow the company to realize economies of scale. I can think of many global brands with immense presences in the shops of international retailers that still cannot handle a global distribution on their own end through the e-comm channel (my company comes to mind).

However, a strategic alliance like that of J.Crew and Net-a-Porter could be just the key. Business partnerships are all about synergies and competencies. What can J.Crew get from Net-a-Porter? What can Net-a-Porter get from J.Crew? To state the obvious, by tapping into Net-a-Porter's resources and its existing distribution network, J.Crew can now hit markets across all continents. But beyond that, it is probably going to quadruple its brand equity by increasing its international exposure. Now, it can transform from American lifestyle brand into a global lifestyle brand for customers seeking luxury and "classics with a twist" everywhere. And even the mere association with Net-a-Porter is enough to elevate its brand; the site is one of the leading e-tailers of luxe goods. It has an existing reputation as the best of the best. A company that can convince Isabel Marant (a designer known eminently for being so uber-exclusive in her wholesale distribution that you might never come across her line in a store) to SELL ONLINE? This news rocked the fashion world like you couldn't believe. A company that could do that -- well, they must be good.

Back to competencies - Having its hand dipped in the international pool is also a great way to lessen risk against an adverse economy at home. After a bloody battle with the American recession, many retailers have looked into joining booming markets overseas for financial savior. One of the reasons (perhaps most important) that my company succeeds is because of its presence overseas; it is in fact a much, much bigger brand globally than it is domestically. So when our sales here are subpar (well, we're hitting plan, but just barely), we're still winning the big race because of our activity overseas.

Now -- what can Net-a-Porter get from J.Crew? Well to start, it garners the patronage of J.Crew fans around the globe -- many of whom might not shop Net-a-Porter otherwise. Though it still has a luxe aesthetic, J.Crew undoubtedly occupies a lower price point than most of Net-a-Porter brands. And price aside, its products are great VALUE. So for value-seeking customers who want luxury but don't want to shell out $625 for a straw L'Wren Scott hat (wtf? who would?), they could turn to J.Crew for a hat just as adorable, just as trend-right, just as expensive looking, but for a friendlier price.

Next, we know that Net-a-Porter plans to offer J.Crew exclusives. This is smart on two accounts. First, your international customer is not entirely the same as your U.S. customer. While some trends are indeed global, others aren't. I heard J.Crew will develop exclusive colorways of existing styles for Net-a-Porter. This is a great, easy (from the design/merch standpoint) and fairly inexpensive way to tailor to the international customer. But on top of that -- I'm sure Net-a-Porter is well aware that J.Crew isn't just a clothing line. It's a lifestyle brand, and one that its customers feel a deep affinity to. I speak from experience -- you don't just like J.Crew; you LOVE J.Crew. You want everything, and you want it in two colors. So not only will Net-a-Porter attract clicks from J.Crew fans abroad, but it will still draw in domestic shoppers who want the exclusives.

The whole thing is genius, really. I couldn't have imagined a better partnership. Can't wait to see how the two companies roll it out in May -- and what the international reaction will be like.