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Joe Fresh eyes more international expansion; looks to China and Japan

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TORONTO - The head of Joe Fresh says the Canadian clothing brand will announce more international expansion plans in the next few months as it prepares for its first foray as a new player into an already oversaturated retail market.

"We will be challenged in that way, relative to some of the mega brands," said creative director Joe Mimran in an interview Friday.

"But having said that, it's also great to be the new kid on the block. New is also a pretty powerful word; a new point of view."

Earlier this week, grocery giant Loblaw Companies Ltd. (TSX:L) said it was going to be selling the discount clothing line outside North America for the very first time as it tries to target bargain-minded fashionistas in key growth markets like the Middle East and North Africa.

The rollout over the next four years will include the opening of up to 141 Joe Fresh stores in 23 countries, including South Korea and eastern Europe.

Mimran, who was a co-founder of Club Monaco before developing the Joe Fresh brand, said the company is already in talks about more store openings overseas, particularly in Asian markets like China and Japan. It's also eyeing Russia and South America.

He said he expects the clothing line's offering of basic fashions at a reasonable price will appeal to an emerging middle-class consumer in these regions.

And despite fierce competition from international brands like H&M and Forever 21, which already have a strong presence in these countries, Mimran is confident that Joe Fresh can establish its own presence by differentiating itself from being just another "fast fashion" purveyor.

"We certainly have seen them all come into the Canadian market over the last 10 to 20 years," said Mimran. "I think scale is important and you've got to be expanding internationally to achieve that scale."

Most of the overseas stores will be in stand-alone properties, ranging from 3,000 to 6,000 square feet, with the remainder to be opened inside department stores.

He said the assortment made available will require some "tweaking" due to climate and ethnic sensitivities, but the majority will have all the categories available in Canadian outlets, including clothing, accessories, shoes and cosmetics.

"Our goal is to maintain our assortment. We believe it will appeal to all markets," said Mimran. "Canada is very multi-ethnic so we already have to cross a lot of ethnic lines and tastes."

The discount clothing retailer is also not crossing off opening up more stores in Canada and the U.S., where it entered in 2012.

Currently, Loblaw sells the apparel brand at more than 340 locations inside its Canadian supermarkets, and in 12 stand-alone and studio stores. It also has six locations in New York and New Jersey and the line is available in J.C. Penney stores in the U.S.

"'Consumers are hungry for branded goods at a value price," said Mario Grauso, chief operating officer at Joe Fresh, who joined the clothing chain five months ago from Vera Wang.

"All these markets have a tremendous amount of brands entering but very few are entering at this value. We will be welcomed by the consumers, because of our price value and our current image and branding."

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