Firm factors that influence internationalisation and subsequent financial performance of fashion retailers

Abstract

Purpose – Grounded in the Uppsala model, the purpose of this paper is to investigate specific firm factors of fashion service retailers, which include: product category offering, firm experience (limited vs extensive) and firm size (small vs large) and examines how variations in these firm characteristics produce significant differences on three aspects of internationalisation activities; scale and scope of internationalisation, market choice (geographic and cultural distance), and financial performance (international sales and profit), and whether market choice produces differences on financial performance. Design/methodology/approach – Secondary sources were utilised to empirically investigate retailers (n=118). Information regarding product category offering, year of establishment, number of employees, countries entered, international sales, and profit were collected from retailer web sites, press releases, and annual reports. Findings – There were significant differences between product category offering and firm size in retailers’ internationalisation behaviours, and there were significant differences between product category offering and market choice in their financial performance. Variations in firm experience did not produce any significant differences. Research limitations/implications – This study extends limited literature on the internationalisation of fashion service retailers and contributes knowledge of how variations in specific firm factors produce different outcomes in terms of internationalisation, market choice, and financial performance. Practical implications – Retailers offering functional products may be more flexible in their internationalisation. Firms regardless of experience or size may consider being active in international markets because variations in these factors does not impact performance. Originality/value – This study addresses multiple gaps in retailer internationalisation literature and findings point that product category should be considered when studying internationalisation of service firms.