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Shopping Center Business recently interviewed Linda Miller, president of retail consultancy LM Global
Retail Services. Miller, a friend to this magazine since our launch, works domestically and abroad to
assist U.S. retailers expand internationally, foreign developers attract U.S. retailers and foreign retailers
enter the U.S. Her career has seen stops at Western Development, The Mills Corporation, The Taubman
Company, and others before she launched her consultancy more than 5 years ago.

SCB: The world of retail is becoming more global. How long have you been working in the international
retail markets?


Miller

Miller: I have been working internationally for over 15 years, having lived and worked in countries
such as Japan, Italy, Spain, France, the United Kingdom, the United Arab Emirates (Dubai), Singapore,
China and, more recently, Russia.

SCB: While brands like Levi’s have been popular overseas, are U.S. brands welcome in other countries
today?

Miller: Many countries are much more brand conscious than the United States. China, Japan and the
Middle East are much more aware of all brands, not just the luxury brands. U.S. brands are well known
and received. Coach opened years ago in Japan and does extremely well. You can see almost every brand
in Dubai and expanding into other emirates and countries. In fact, on one of my last trips to Dubai, I
passed a group of young men with traditional clothing and was pleasantly surprised to see them all
wearing  New York Yankees ball caps. Of course, this is only an example of the level of interest in the U.
S., our culture and brands.

SCB: There are a number of developers in foreign countries looking to develop centers with U.S.
retailers. How do you work with U.S. retailers to go abroad? In which countries are you working?

Miller: I am now working with Ikea Ros Development, who owns 14 malls throughout Russia and China,
and The Windfall Group for outlet malls in China. Although it is complex and challenging to go into
another country, there is a huge opportunity and it is easier to work with a company that already has
established itself, knows the markets and has relationships with operators or potential licensees. The
contracts are complex and the challenges are huge, but so are the rewards for the retailer. I work with a
developer in understanding each market, its customer, trade area and demographics the same as you
would in the U.S., except that there are more potential retailers because you have numerous countries
and regions that may be open to having stores in the market, particularly in China and Russia. In these
countries it is primarily through operators or licensees. Understanding each country and the most
reputable partners is important in introducing them to U.S. retailers and restaurants. The
licensing/franchising/partnerships are also unique to each country and need to be reviewed and
thoroughly negotiated. Restaurant operators are finding it very profitable to open in other countries,
particularly with local operators who have made it easier in so many ways. Working with U.S. retailers
involves contacting the international representative, which is typically different than the real estate
representatives actively working on sites in the U.S. Many of the celebrity chefs have been approached
and considered opening restaurants in other countries and operators are interested in having the quality
of these restaurants with known U.S. chefs.

SCB: You have a lot of experience in the outlet industry here in the United States and also opened an
outlet in Tokyo. Are outlets popular in other countries?

Miller: Outlets have taken a while to catch on in China. Chelsea was one of the pioneers of the outlet
industry in Asia. They have a number of great projects in Japan. There are a number of highly successful
outlets throughout Europe with more under development. There are a number of companies, including a
client of mine, The Windfall Group, who is developing outlets in China. The population base and the
strong economy and support of the government have improved the infrastructure of many of the second
and third tier cities. This has given developers an opportunity for growth of mixed-use projects,
including outlets. My company works to coordinate with the U.S. office and assist them in understanding
the outlet industry, design, merchandising and economics of leasing and introduce them to U.S. brands
and potential licensees.

SCB: Is it the same in the Middle East? What has your experience there been like?

Miller: I have worked with the Al Futtaim Group, owners of Dubai Festival City, introducing U.S.
retailers and restaurant operators to the Middle East. In that case it was primarily done through licensing
or some variation on that. There are a number of strong ‘retailers’ who license numerous brands. It is
important to partner with a company that understands the price point and customer you have established
if you are looking to license. There are several very strong operators in the Middle East who have
licensed numerous U.S. brands including Limited Brands, Guess, Build-A-Bear and Outback Steakhouse.

SCB: What would be the first recommendation you would make to a retailer who is considering going
overseas?

Miller: The fundamentals are important of any retail business. Whether you speak the native language is
not as important as understanding and respecting the cultural differences. Don’t be the ugly American
and try to push your way in, act like you know more than they do, and don’t jump to any conclusions.
Retail is all about location, location, location, and whether you are going overseas or entering the U.S.,
that basic principle has to be maintained. Second to that, I would say do your homework, go slow and
develop relationships, learn the culture and customs. The U.S. is very consistent and retailers are
comfortable with that. However, each country, although they share a border, is different. It may be
worthwhile to consider buying a brand to enter a market and grow from there.

SCB: After a retailer has made the commitment to take its act overseas, what next steps would you
recommend?

Miller: Do the same things you would do entering a new market here in the United States but expand on
that checklist. In addition to knowing the market, the customer and the courtesies, know the challenges
of customs, shipping and distribution within the country or area. Remember that in many of the
countries the streets are narrower and shipments and deliveries have to be made more frequently to the
stores. People skills are also critical. Technology has become an integral part of any retail operation and it
is important to have the infrastructure set up and functioning properly.

SCB: Would you recommend a retailer go directly into a new country or form a partnership or license
agreement?

Miller: Each country is different and very complex. It isn’t as simple as you might think; particularly
when you think they speak the same language. They merchandise stores differently, their employment
systems, technology and work habits are different. If you aren’t prepared to make a commitment to
employing people and integrating your culture into a foreign country, then you should work out a
licensing agreement but maintain the integrity of your brand by strict guidelines and limitations on how
the product is merchandised.

SCB: How much influence does the U.S. corporate office have over the brand when it goes international?

Miller: The U.S. office sets the rules and should have approval of site locations. In many countries it is a
retailer that has a number of brands and they lease a block of space. They like to put their stores together
in this grouping which may not be synergistic and/or the best location in that mall for your brand.
Review the lease documents as they may be different in each country with specific clauses appropriate to
the country or region. Typically foreign leases are much shorter than the U.S., so be patient and ready to
accept these differences or walk away.

SCB: While you have worked in a number of countries, have you ever lived abroad?

Miller: Yes, I lived in Milan for almost 2 years while working for The Taubman Company and spent a
majority of my time in Japan for about 2 years while working for AMI, when I was opening an outlet
center in Sagamiono, outside of Tokyo.

SCB: Did you learn more about retail from that experience?

Miller: It was a unique opportunity to learn about Europe and begin to understand the fashion and retail
business in a number of countries. I learned the hard way about making assumptions about the language.
I thought a lot more English would be spoken and that it would be easier than it was. It was a challenge,
but very rewarding for me personally. I learned that just because countries share a border doesn’t mean
they share the same culture or retail experiences. Some countries took longer to accept the enclosed malls
here in the U.S. It taught me about the importance of the high street — the ever-present top street for
retail in every European city — and the differences and comparisons to U.S. retail. In the U.S., we have
very few cities with high street or successful retail in urban areas. For the European retailers there was
an educational process in understanding the malls and the advantages of co-tenancy and developer
relationships. Japan is a whole different story but a tremendous opportunity to know the culture and
develop relationships, some of which I maintain today.

SCB: Do you see the U.S. retail industry expanding its reach internationally more than it has in recent
years? What about foreign retailers who are interested in expanding to the U.S.?

Miller:  I think it is wide open. Technology has made information available at a touch of a button and
viral marketing has made brands more visible to other countries. It is not only an opportunity for U.S.
retailers to go abroad, but for foreign brands to open in the U.S. We see more and more international
brands successfully opening in the United States such as Uniqlo, Who AU, Desigual, Mango and Zara
and, of course, the luxury brands. With the economic challenges we have had in the United States, it has
opened up the opportunity for foreign brands to enter the market and find great locations in malls or
areas that they never could have imagined. Just like when a U.S. company goes overseas, the brands
entering the U.S. must also develop relationships with developers, consultants or partners and be
cautious and strategic when opening stores. History has shown that a few European brands in the past
have opened too aggressively only to find they didn’t understand the market, the distribution and sizing
was a problem or they made bad real estate choices.

SCB: Who are the U.S. players actively developing retail projects overseas?

Miller: There are a number of U.S. developers overseas, such as Urban Retail Properties, Developers
Diversified, Taubman and Simon, among others. They are working in various countries including
China, Brazil, Japan, Korea and other Latin countries or partnering [with local developers] in other
regions. Asia right now is exciting because of the strength and growth of China, Vietnam and South
Korea. The retailers are recognizing that the U.S. has become saturated with retail stores and there is a
need to diversify, whether it is through expanded sales on the web or through expansion in Europe, Asia
or the Middle East. Numerous U.S. brands are already in the Middle East and Europe with continuing
successful expansion. The weakening of the Euro has helped this expansion, and it is great time for U.S.
retailers to explore international expansion.
International Maven
Linda Miller has spent her career bringing foreign retailers to America, and taking
American retailers overseas. Here, she offers her input on the increasing globalization
of retail today.

Interview by Randall Shearin