Pakistani fashion brand Khaadi makes first moves in U.S.
With more than 25 years under its belt and a well-established presence in other parts of the world, a fashion brand is making its next big leap.
Khaadi, a fashion brand that began in Pakistan especially known for women’s clothing, is expanding into North America for the first time. The company opened its first store in the U.S. in February at Tysons Corner Center in Virginia near Washington, D.C., and soon followed that with a distribution center in the D.C. area to support its online business before opening its second U.S. store in June in Houston’s Galleria mall, according to real estate brokerage Cushman & Wakefield.
The company describes its brand as having vibrant colors, intricate craftsmanship and a connection to Pakistani culture and heritage. Shamoon Sultan started the company in Pakistan in 1998, selling handwoven clothing. The company later added women’s ready-to-wear clothing by 2002 and broadened to kids, home and accessories lines in the 2010s, according to its website. It now has more than 50 stores, opening its first in the United Arab Emirates in 2010 and in the United Kingdom in 2013. In 2017, Pakistan news outlet Profit reported that the company made close to 16 billion Pakistani Rupees in revenue in the previous year, or about $57.4 million, citing anonymous sources.
The D.C. location “marked a significant milestone” toward Khaadi’s expansion goals in the U.S., its CEO of international business Rehan Syed said in a news release in February. He called the U.S. one of its primary markets for the coming years. Syed was not available for an interview prior to publication.
Although American shoppers are pulling back spending on discretionary items like apparel, the U.S. still continues to be an attractive market for international brands looking to scale their businesses. The Asian population in the U.S. grew 81% from 2000 to 2019, according to the Pew Research Center’s analysis of Census data.
“The international interest in the U.S. is widespread, our populations in the major cities have become more diverse, we have people coming from all over the world to be educated in our universities, and they like it here and they stay,” said Eric Lestin of Cushman & Wakefield, who represents Khaadi in transactions throughout North America, such as the lease in Houston. “That has created diverse populations, particularly in the major metropolitan areas, and just as rooftops drive retail, diverse populations drive diverse retailers.”
Lestin said the company is now considering markets throughout North America for additional stores and is in lease negotiations for locations in the New York City and Chicago markets. He said Toronto will likely be home to the first Canadian store.
Like it is now doing in the U.S., Khaadi had a national strategy to its U.K. expansion, opening in cities throughout the country including Birmingham, Bradford, London and Manchester.
As mall owners such as Simon and Brookfield are looking to drive traffic to their properties — some reimagining the properties through mixed-use redevelopments and residential uses — they want tenants that reflect the diversity of the population to drive traffic, Lestin said.
Sudip Mazumder, svp and retail industry lead for Publicis Sapient, said Khaadi — with its focus on handcrafted styles and sustainable materials — fits with a trend over roughly the last five years of customers especially valuing authenticity and sustainability initiatives. He also said e-commerce and social media allow small brands to grow while bypassing traditional retail channels, and it can make it easier for international brands to reach U.S. audiences without having to go through the challenges of establishing a physical presence.
Other international brands — including Ireland-based Primark, Spanish retailer Mango, Italian lingerie and loungewear brand Intimissimi and Uniqlo from Japan — have similarly pursued aggressive expansion plans throughout the U.S.
“The more these brands come in, there will be more choices for consumers, and I think it’s going to help shake up the retail sector, because it’s kind of getting stale — a lot of the department stores are closing down,” Mazumder said.