STORES 2017 BIG Show Daily - January 16, 2017 - 18

2017 MONDAY

18
outside world, there will definitely be more
brand awareness," Fitzgerald says. "It's
Continued from page 17
going to be in these aspirational categories around fashion and electronics where
Late former President Fidel Castro, who you're already seeing brand awareness."
established the Communist state in a 1959
Blu, a U.S.-based smartphone manuoverthrow and held on to power until he facturer with high brand awareness in
handed the reins over to his brother in 2008, the country, does not directly distribute
frequently appeared in public wearing an in Cuba, but "they've managed to build
Adidas track suit.
awareness on the island," she says.
"As Cubans get more exposure to the
Asian brands like Haier and Samsung
join European brands like
Lacoste and Nokia as being somewhat entrenched.
"Europeans and Asians
are already there and doing business," Fitzgerald says. "They have for
many years invested in
their brand in an environment that really doesn't
have marketing like we
know it in the Western
world."
As relations thaw
with the United States,
it has opened up other
opportunities for nonU.S. companies. It "has
taken some of the fear
out of doing business with
Cuba," Fitzgerald says.
NRF President and CEO Matthew Shay and former
"There was always a risk
NRF chairman Steve Sadove on a November 2015 visit
when Cuba was on the
to Havana.

Cuba

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state sponsor of terrorism list that the U.S.
would not do business with a company that
was doing business in Cuba. That threat has
gone away."
Sadove believes European retailers
have a bit of a head start as Cuba continues to open up. "You do see some European retailers there, some of the designer
brands," he says. "You will see boutiques
of upper-middle-tier brands that are European-based. You're just starting to see the
explosion of cruise ships.
"You've got to have things that will be
catering to the masses of tourists that will
come in," he says. "If you are a retailer
linking in with tourism, that's where you
will see the opportunities."

Into the unknown

The Castro brothers have run Cuba for
nearly 60 years. Raul Castro has promised
to step down in 2018; the presumed successor, First Vice President Miguel DiazCanal, has kept a low profile and many
of his policy preferences aren't known,
according to PwC.
Political leadership aside, Cuba offers
a steep learning curve for retailers.
"In some ways it's an upside-down
economy," Sadove says. "Doctors and
lawyers are making very little while cab
drivers and entrepreneurs are making a lot
of money. The opportunity for this to be a
vibrant economy as capitalism spreads, as

the markets open ... reminds me of China
25-30 years ago. Much of the economy was
state-controlled, and you were just able to
see the budding of capitalism. It's where
Vietnam was early on. It has the potential
to explode like those did."
Tindell anticipates that agriculture is
"probably going to be the first to see the
benefit, on both sides, with the lifting of the
embargo. And I also see great opportunity
for food-oriented retail. That could actually
be the biggest opportunity of the generation, but it's still a ways off."
"I would tell retailers to watch it
closely," Sadove says. "If you have products that are in those areas that are where
the spending is going to be taking place,
[Havana is] going to potentially be one of
the great tourist destination cities in that
region of the world. It's only 90 miles
from Florida with beautiful beaches. The
architecture is phenomenal."
Tindell suggests retailers visit, and not
just for the scenery. "Have the conversations. Take your team. Listen, learn and
then understand the challenges, opportunities and resources it will take in order
to enter this market. This is a long-term
proposition, but the day will come ... just
not sooner as opposed to later. But I am
optimistic about the potential for Cubans to
enjoy the benefit of a robust retail industry
that will create jobs, lift the economy and
provide opportunity for all Cuban citizens."

STORES 2017 BIG Show Daily - January 16, 2017

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