eign markets. For one thing, they have a product that can easily be tested in new countries through wholesale and licensee channels without having to risk opening own-branded flagships on shoddy real estate platforms. Second, it’s not just about sport: the product itself is an accessible luxury and lifestyle statement, not to mention incredibly functional for walking on crumbling sidewalks and dodging all kinds of moving and stationary obstacles, which applies to most of developing Asia. A case in point is Phnom Penh, Cambodia, where the opening of a handful of modern malls has heralded the introduction of the usual athletic brand suspects, along with some powerful regional players like Li Ning. The latest to launch there is the US privately-held brand New Balance, which arrived in Cambodia for the first time in late January with four stores in the capital, all operated by an Indonesian conglomerate named MAP Active. All were opened more or less simultaneously in each of the four large modern malls that grace the capital: three of these malls are owned by Japan’s Aeon Mall, and the other belongs to local conglomerate Chip Mong, which is involved in retail property, beer brewing and other activities — a specialist at everything, you might say. Inside Retail paid the new New Balance stores a visit last week. We chose to take a look at the stores in the three Aeon malls, officially called Aeon Phnom Penh, Aeon Sen Sok and Aeon Mean Chey, but known to the locals simply as Aeon 1, 2 and 3 according to their sequence of opening. If you were expecting a flagship you will be disappointed The MAP Active New Balance stores are small, and the one in Aeon 1 near the city center is a particularly poky affair. However, it has to be said that the same goes for the other athletic footwear stores in the mall including Adidas, Fila and Li Ning. Even the Decathlon, which is usually supersized, is tiny and not at all a great advertisement for the retailer. Aeon 1 is now 10 years old and in serious need of a facelift. It has been neglected while its Japan-based owners have focussed on getting the two newer malls up and running into the north and south of the city center. This makes Aeon 1, despite its excellent location, a problematic platform for international brands. The New Balance stores at Aeon 2 and Aeon 3 are also small but a whole lot nicer, as are the malls themselves. The demographics at Aeon 2, which is in the suburb of Sen Sok about 7 kilometres northwest of the city center, are favorable for retail and specifically for New Balance. The area has a sizeable expat population and a number of government offices and banks have established headquarters there in recent years, providing an important source of disposable income. An eye for the future Aeon 3, about 8 kilometres south of the city center in Mean Chey, is a different matter again. Brands entering Cambodia are often doing so with much more of an eye to the future than with the expectation of profitability in the present, and Aeon 3 is clearly looking forward, too. Weighing in at an impressive 98,000 square metres of gross leasable area (GLA) on four levels, Aeon 3 is the largest of Aeon Mall’s efforts in Cambodia and certainly its most impressive. It sports eye-popping digital displays and has a health-and-wellness theme that includes a 250-metre indoor walking/running track winding around on the top level. Perfect, you would think, for the launch of athletic apparel stores Unfortunately, Aeon 3 currently suffers from weak foot traffic for a number of reasons. Roadworks at one of the main thoroughfares to the mall are ongoing, but the deeper problem is that there are very few local residents. The building is a surreal sight: it reposes like a great white whale on a 1.74-hectare site. The site itself sits within huge open tracts of cleared land still unsullied by much other human construction as far as the eye can see. There is a big buzz about its potential because of impending residential and commercial development, but that is a long time coming. For New Balance, is it worth it? Retail industry professionals are used to flagships being opened in new markets that are supposed to be experiential brand statements. These New Balance stores are not that. Certainly, one does not expect a huge investment in the stores in what is still something of a retail backwater, but one would at the very least expect a bit of a splash with respect to store fitout and product. These stores don’t make any attempt to wow at all and they beg the obvious question: is there really a point? Or, to put it another way: is a mediocre store better than no store at all? The situation demonstrates one of the pitfalls of launching via a local partner, and indeed it is common for global retailers to end up having to mop up their licensed stores and self-operate them at a later date. For the licensee, of course, there are bragging rights — another high-profile brand in the stable that can attract other high-profile brands — but New Balance sales from these stores are not going to shoot the lights out. At best, they’ll only just be able to keep the lights on.