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Cath Kidston buys up Japanese franchises to build out second-largest market

4 min read

15 July 2015

Former editor

Homeware, accessories and clothing retail brand Cath Kidston has bought the Japanese franchise business of its offering, on the back of double-digital sales growth in the country.

Having previously been owned and operated by Sanei International, the entire store, online and wholesale business will be transferred to a wholly-owned subsidiary – Cath Kidston Japan.

The deal comes as sales in the Asian nation hit in excess of £23m, meaning it is now the biggest market for Cath Kidston outside of the UK. Home, childrensware and bags have reportedly driven growth in the last four years, with the business having first established itself in Japan in 2006. Sanei International had owned the franchise operation since 2011.

Cath Kidston began life as a single unit in London’s Holland Park in 1993, set up by the entrepreneur who put her name to the business. Since then, it has expanded into 16 countries, with its first Middle East location opening in Saudi Arabia in January 2015. Speaking to Real Business back in 2009, Kidston revealed the decision to name the business after herself was done so that old clients, from her time working in a vintage curtain business, could find her in the phone book.

Explaining how the initial product line came along, she said: “I was planning to make wallpaper and furnishing fabrics with a sideline vintage shop.

“So I ordered lot of fabric from eastern Europe. It was meant to come by the yard, but as they also had a bedlinen factory, I asked the company if they would make some of the fabric into kids duvets. There was a misunderstanding and when the fabric arrived, it was all children’s duvets and pillow cases. To salvage stock I started making stock aprons and tea towels.”

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Kenny Wilson, CEO of Cath Kidston, commented: “Japan is our biggest market outside the UK and a key part of our strategy to globalise the brand.

“During 2016 we will celebrate our tenth anniversary since opening the first store in Tokyo and we see real opportunitIes to grow the brand even further across Asia.”

Cath Kidston’s most recent set of financial figures, covering the year to date 30 March 2014, revealed increased sales of 10 per cent to £116m and EBITDA up 19 per cent to £25m. Outside of the UK, international retail stales grew 37 per cent to £46m.

Wilson described the deal as a “unique opportunity” to take full control of the Japanese business, and added Sanei International had been a “trusted” franchise partner helping to grow the store count to 30.

“Our desire to buy, and Sanei’s decision to sell back the business, fitted perfectly with each other’s strategy,” he added. “We are grateful to the Sanei management team in developing the business over the last four years. We have been delighted by the response of the Japanese staff to our decision to take full ownership of the stores.”

"My business came about by happy accident," says Cath Kidston