International expansion will dent Harrods’ exclusivity

Mohamed al-Fayed has sold Harrods, the luxury department store, this week and speculation is already rampant that the new owners are poised to expand the brand internationally.

The Knightsbridge department store was bought by the Qatari Holdings company, which is owned by the Qatari royal family, in a £1.5bn deal that was finalised over the weekend.

Al-Fayed has previously denied rumours that he was entertaining bids for the store, but now his 25 year tenure is drawing to a close.

The group is already thought to be plotting to take the brand into the Far East with outposts in Shanghai and elsewhere throughout the region.

Harrods is a quintessentially English brand and draws tourists from all over the world who flock through its doors not only as customers to a shop but as visitors to an attraction.

Its new owners are obviously keen to leverage the Harrods brand’s huge international recognition and reputation to build its presence abroad following in the footsteps of Harvey Nichols, another of Britain’s traditionally opulent department stores. It is owned by a Hong Kong based businessman and has stores in Saudi Arabia, Hong Kong, Dubai, Jakarta and Istanbul in Turkey.

It seems natural to want to export a brand with so much international appeal to overseas locations where its British heritage has considerable marketing pull, but doesn’t that serve to dilute what the Harrods brand stands for and its appeal in the first place?

Simon Middleton, author of Build A Brand In 30 Days, warns although there is huge potential for the Harrods brand globally, that any expansion must be handled thoughtfully.

“Harrods could be taken forward in a similar way to longstanding luxury product brands like Hermes, which developed dramatically over the last three decades without losing its cachet.”

“The luxury goods market is a crowded one but Harrods is a tremendously evocative brand name right around the world, and has real potential in wealth hotspots of the Middle East, the Far East, Russia and potentially China. There is enough serious wealth around the world to make the brand work, but you mustn’t be ostentatious or tacky.”

I agree but the Harrods brand is steeped in British tradition and history and that’s why people are drawn to it.

The attraction is not just in the products it sells, or the iconic Harrods fascia but a combination of exclusive factors, not least the building itself, its British heritage and because it’s part and parcel of a “London experience”.

Will a replica of the Knightsbridge store in Shanghai have quite the same appeal? I doubt it.

It might look the same, but it won’t be the same.

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