Isak Halfon on the Challenges of Scaling Retail in a Saturated Global Landscape

Isak Halfon was in charge of the expansion of large Spanish companies such as Mango and Blanco, at a time, he recalls, when entering a country was less complicated than it is today. “Expanding is much more difficult now, there are not so many virgin markets left,“ he says. After years in the sector, Halfon currently leads the business in Spain of Global Bridges with his son, an online platform that facilitates the entry of foreign companies in marketplaces of U.S. giants such as Nordstrom or Macy’s. In less than a year, the executive has already facilitated companies such as Scalpers, Uno de 50 or Salsa Jeans to take their catalog to the largest consumer market in the world Is it smart to enter the country today? Are tariffs forever? Are the United Kingdom or India good alternatives?

Question: What does a company gain by entering the U.S. market?

Answer: It is a huge market, with an extraordinary consumption rate. Just think that through its marketplace alone, a company like Nordstrom has a turnover of 4.5 billion. They are giants in a giant market, which makes everyone want to enter, not only because they sell more, but also because they can sell it more expensively. There, Spanish brands can sell at a price that they cannot sell here, so it is a profitable market with a higher margin.

Q.: And what are the main challenges you face?

A.: The main one now is clearly not manufacturing in China, as a result of the tariffs that Donald Trump’s government is implementing. But all this is in the short term, it is temporary, and in three years, when the current president’s term ends, the waters will return to their course. Some barriers may remain, but the dollar is down and it is because of Donald Trump’s policies, so everything will eventually return to normal. The main long-term challenge, therefore, is the same as why it is an opportunity: because it is very big, and very different, not only from other markets, but within the same market. And also very expensive in transportation, personnel, rents, etc.

Q.: Considering precisely this global business scenario, is it smart to bet on the U.S. market?

A.: It is a challenge, clearly, it means testing yourself to prove whether you are capable of making your product work. Opening 20 stores in Spain all at once is a lot, in the United States, nothing. Moreover, there, I repeat, it is not the same to open in a cosmopolitan and liberal area such as California as in what they call the religious belt, in Texas, for example. Sizes are also very different, both in comparison with Europe and within the country itself.

“Opening 20 stores in Spain at once is a lot, in the United States, nothing”

Q.: How does Global Bridges help to overcome these difficulties?

A.: We act as a bridge, we ensure that the merchandise does not have to travel to the United States until it is sold, it is a firm shipment, which reduces the risk of paying, for example, a shipping or customs cost for a product that will not end up being sold. And if it is returned, it can stay there for up to six months for disposal. In short, the item only crosses the pond when it is sold.

Q.: Is it more difficult today than it was a decade ago to expand?

A.: Yes, I think that back then, when I was at Mango, for example, the markets were much more virgin than now, which are much more specialized and need more work to enter them. You have to adapt the collection, for example, or the franchises no longer have so many outlets, and everything is more complex. At one time I could open up to a hundred stores a year, but now, with the Internet, for example, this franchise model is disappearing.

Q.: Can this business expand to other markets? Would it make business sense?

A.: Sure, in fact, we are now setting up something similar in the United Kingdom, and when we have the structure there, we are also looking at South Africa, Australia and even China, for example. But we are going to go little by little, we want to focus first on the Anglo-Saxon world, which are markets that are already sufficiently different from ours, and we can help brands to test them.

“If 10% of India reaches a middle income, they are already twice as many consumers as here”

Q.: Given your experience and track record, which are the most interesting markets today and which do you not recommend?

A.: The United States, of course, and then Canada and the United Kingdom, the latter two, although smaller, are just as interesting. And in the opposite direction, they are always the countries of the southern hemisphere, but because they are more complicated, they have customs disadvantages or the seasonal difference itself, which makes them buy swimsuits when here we sell coats. From a more general point of view, I would say that the least interesting countries are always the small ones, and the most difficult ones, those that already have their sales platforms established and you have to enter, yes or yes, with a local partner.

Q.: Now the sector seems to be looking at India as a consumer market, not only as a production hub. Is this a good bet?

A.: Yes, but customs there are still very high, and a product can become between 50% and 70% more expensive. But for the future, it has a lot of potential, because if we imagine, for example, that 10% of the population of India manages to reach a middle income, that means between 70 million and 150 million consumers, more than twice as many as in Spain, which has less than 50 million.