Dive Brief:

• Hunting for brick-and-mortar expansion, lifestyle fashion brand Scotch & Soda is opening 22 new physical locations globally by the end of the year, including 15 stores and 7 shop-in-shops.
• The apparel brand has opened 34 stores and 27 shop-in-shops since the beginning of the year, according to a company press release, bringing its total retail and franchise footprint to 249 stores and 280 shop-in-shops by the end of the year.
• Two of the new DTC stores will open in the U.S. in October, where it already operates 39 locations, per its website. The expansion is aimed at establishing a foothold in key global cities like Paris, Madrid, Mumbai, Stuttgart and Perth.

Dive Insight:

Originally a wholesale brand, Amsterdam-based Scotch & Soda is pursuing a broad-based physical expansion that spans across Europe, Asia-Pacific, North America and the Middle East. Scotch & Soda, in March this year, debuted a new brand identity and logo, which will be present in its new locations.

Ahead of the upcoming holiday season, Scotch & Soda is also expanding its lifestyle categories, including by introducing three new styles of bags and pursuing a deeper presence in fragrance with home, travel sizes and gift sets. Notably, the brand is prioritizing its own channels for the new bags, with those styles available exclusively online, as well as at franchise and directly operated stores, for the first season.

The company is also opening its first digital store on Tmall in China, which comes after it launched in the country in July. Scotch & Soda has plans to open stores in "key Chinese cities" in the near future, and CEO Frederick Lukoff sees the country as one of the critical markets for the brand.

"We are very proud to announce that Scotch & Soda is accelerating its growth strategy. It is indeed a very exciting time for our company despite the challenges caused by the COVID-19 pandemic in the retail industry," Lukoff said. "We are pursuing the expansion of our retail network at a global level, strengthening our footprint in markets where we are already present, as well as entering key markets such as China, that we see as full of potential to reach new customers and introduce them to our brand."

When Scotch & Soda was acquired by private equity firm Sun Capital Partners in 2011, it was far more of a wholesale brand. The company had approximately 30 company-owned and franchised retail stores, in comparison to 7,000 partnership accounts. Scotch & Soda still boasts some 7,000 wholesale doors, but it now has 235 freestanding stores globally. 

By expanding its own fleet of stores, Scotch & Soda is taking a similar strategy to many other wholesale brands looking to make higher margins by selling more DTC. Well-known retailers like Nike and Adidas are pivoting a higher percentage of sales to the model, while cutting back on wholesale partners, to drive future growth.