Loblaw Opening 141 Joe Fresh Stores Across Europe and Asia

Loblaw Cos. (L), the retail company that owns Canada’s biggest grocery chain, will open about 141 Joe Fresh clothing stores in 23 countries over the next five years in the brand’s first expansion beyond North America.

The move will involve partnerships with three other companies and will focus on the Middle East, Eastern Europe and South Korea, Loblaw said in a statement today.

“These first international agreements signify an important milestone for Joe Fresh as we build on the strong foundation we’ve established at home in Canada,” said Joe Mimran, creative director of Joe Fresh.

The global expansion builds on a deal with J.C. Penney Co. last year that installed mini-stores inside 650 department stores across the U.S. Joe Fresh, which Mimran founded in 2006 in partnership with Loblaw, is known for its cheap-chic styles. The latest partnerships let the company grow without having to spend a lot of money, said Galen Weston, chief executive officer of Brampton, Ontario-based Loblaw.

“It’s a wholesale arrangement, so no material risk from a capital perspective,” Weston said on a conference call with analysts today. “There is an international level of opportunity for the Joe Fresh brand, and lots of people are interested in helping us to realize that.”

Saudi Arabia

One of the partners, Fawaz Abdulaziz Alhokair & Co., will open at least 96 stores in countries ranging from Saudi Arabia to Kazakhstan, Loblaw said in the statement.

“We believe this partnership has the potential to become the world’s single largest retail franchise,” Simon Marshall, CEO of the Riyadh, Saudi Arabia-based company said in the Loblaw statement.

Retail Arabia International LLC will open 15 stores in five countries by 2018, and Origin & Co. Ltd. will open as many as 30 stores in South Korea over the next five years. Retail Arabia is a closely held company based in Dubai, while Seoul-based Origin was established by South Korean machine component maker Iljin Group to distribute Joe Fresh in the country, Loblaw said.

Loblaw shares rose 4.8 percent to C$44.29 at the close in Toronto. The stock has climbed 4.5 percent this year.

Joe Fresh was one of the brands whose suppliers made garments at the Rana Plaza garment factory in Bangladesh that collapsed last April, killing more than 1,000 workers. A fire at another factory in the country’s capital that made some of the company’s clothes killed at least nine others in October.

The company has standards for suppliers to ensure products are made in a sociably responsible way, Julija Hunter, a Loblaw spokeswoman, said at the time.

To contact the reporter on this story: Gerrit De Vynck in Toronto at gdevynck@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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