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Building Retail Brands

Establishing and communicating a brand may be harder for multibrand retailers than for their single-brand counterparts, but brand building is essential for both. Article from McKinsey Quarterly.

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Facing a marketplace overflowing with stores, most retailers have spent the past several years tirelessly searching for new ways to grow. In the case of runaway successes such as the apparel manufacturers Nike and Calvin Klein, the secret appears to be strong, well-leveraged brands, which, McKinsey research shows, add five points on average to shareholder returns. Do retailers have the same access to brand magic?

Vertically integrated ones certainly do. Companies, such as Gap and Victoria's Secret, that design, manufacture, and market their own products have very substantial long-term growth expectations embedded in their share price, reflecting, in part, the expectations created by their brand strength.

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