Forever New is a women’s fashion retailer headquartered in Melbourne, Australia. Founded in 2006, the brand has a global, omni-channel presence in markets such as Australia, New Zealand, India, Singapore, South Africa and Canada.
While its core bricks and mortar channel was well established in existing markets, Forever New sought to leverage less capex intensive channels when establishing a presence in new markets.
When it came to establishing the brand in Europe, Forever New looked to establish concession partnerships with major department stores located throughout Europe.
Sansdesk is a long term strategic partner of ours. They are a sounding board for tax matters and their attitude and approach fit in well with our business.
Being Forever New’s initial foray into the European market, the ability to gain traction in various European countries was highly uncertain. For this reason, there was a need for an operating model with flexibility to set up and shut down concession stores located across multiple countries quickly and cost-effectively.
Challenges servicing Europe concessions included stock fulfilment, income tax presence, VAT presence and employment of local staff all required consideration on a country by country basis. Ongoing uncertainty around the medium term implications of Brexit also needed to be considered.
We examined the commercial requirements in each country where concessions would be located and the merits of setting up subsidiary companies or branch offices.
Driven by the uncertainty around traction in certain countries, our analysis was equally weighted toward the efficient repatriation of profits from successful markets and reducing the likelihood of losses being trapped in unsuccessful markets.
This led us to recommend an operating model with a subsidiary located in the country where the distribution centre would be located and branches established in the various countries where concessions would be located.
We also considered the movement of stock between these locations, including the possibility of a customs border between the UK and continental Europe and provided assistance with local tax, VAT and import registrations.