Iconic British high street fashion brand TOPSHOP will open its first store in Greater China on June 6th, 2013.

The 14,000 square foot flagship in Asia Standard Tower, positioned at the heart of Hong Kong’s bustling Queens Road Central, will bring the best of its cool British styles and trends, with more than 300 new pieces delivered every week.

TOPSHOP owner Sir Philip Green said: “This is a very exciting step in the continued growth of TOPSHOP as a global, yet uniquely British, brand. I am confident that fashion-loving Hong Kong customers will enjoy the retail experience and fantastic products that TOPSHOP offers them.”

In addition to the trend-led mainline collections, shoppers will be able to enjoy the best ranges from the British brand including Unique, the seasonal collection shown at London Fashion Week, Boutique, the brand’s premium limited edition line, and the designer collaborations TOPSHOP is recognised for worldwide.

TOPSHOP’s world-renowned and complimentary by-appointment Personal Shopping service will be conducted from a dedicated suite, where experienced personal shoppers will be on hand to offer style advice.

A host of special activities on the streets of Hong Kong will lead up to the launch which will be officiated by Sir Philip Green.

LAB Concept, a subsidiary of iconic luxury department store Lane Crawford, which opened a new contemporary fashion destination in Queensway Plaza, Hong Kong, in 2012, will manage the TOPSHOP business, providing the retail space and operational expertise, including staff and logistics support.

A TOPSHOP corner will also open in LAB Concept at Queensway Plaza later this year.

Andrew Keith, President of Lane Crawford, said: “From our own businesses, we’ve seen the growing demand from customers who want accessibility to fashion and beauty without compromise on design or trend. TOPSHOP is going to give them that and more — an unparalleled experience with cool product and great service in a dynamic environment that makes shopping fun.”

Source: Fibre2Fashion

As first-quarter earnings reports roll in for luxury brands, the effect of the China market continues to play an increasingly large role in their overall numbers. Although makers of certain goods such as watches and baijiu have taken major hits this quarter as China’s luxury crackdown continues, the results for major fashion labels and multi-industry luxury conglomerates are more of a mixed bag.

Jing Daily has taken a look at the role of China in some of the most talked-about earnings reports from the first quarter, and the news is not all bad. For some, such as Hermès, China continues to be the place to make up for lagging growth numbers elsewhere, while others with slower growth, such as PPR, saw individual brands do particularly well in the Chinese market.

Many of the companies discussed below have seen at least a third of their total sales coming from Asia and another huge portion from Chinese tourists buying abroad, making it crucial to examine the role China plays in their total growth.

Salvatore Ferragamo 

With the Asia-Pacific area comprising 36 percent of its sales, Florence-based Ferragamo had a highly successful first quarter by doubling its overall profits. Asia was up 6 percent compared with first-quarter growth last year, and China’s retail growth rose by 20 percent. The company’s chief executive Michele Norsa said that second- and third-tier Chinese cities in particular were driving these successful China numbers.

Burberry

Although Burberry experienced plunging stocks in September, it reported double-digit growth from the six months leading up to March 31, providing a spark of optimism for those worried about slowing markets. Asia sales, which comprise 42 percent of the group’s total revenues, rose 15 percent. This does not count Chinese travelers purchasing goods in Europe, as Burberry’s outgoing chief financial officer has stated that tourists from abroad make up half of the company’s Europe sales.

LVMH

The luxury conglomerate had a sluggish first quarter with 5.5 percent revenue growth attributed to a lack of Asia demand, but some of its divisions did better than others in the region, which comprises 33 percent of the company’s revenue. The wine and spirits division saw 12 percent growth thanks in part to growing Chinese demand for Hennessey Cognac, and the selective retailing division actually saw 42 percent growth in Asia as opposed to 9 percent in the United States.

PPR (Soon to be Kering)

Kering’s overall first-quarter numbers were labelled “disappointing” by the Savigny Luxury Index. However, according to the company, its biggest bright spot for China was Bottega Veneta, which was up more than 20 percent and was a factor in the brand’s 9 percent overall growth. Gucci’s revenue growth in China was “high,” according to the company’s first-quarter summary, with an overall 4 percent revenue increase. Asia sales accounted for 25 percent of the group’s total sales, a slight increase from last year’s 24.5 percent.

Hermès 

Despite having the lowest first-quarter growth since 2009, the luxury giant’s overall 10 percent rise in sales was boosted by a 17 percent increase in non-Japan Asia (which includes China, Macau, and Taiwan). In addition, Chinese tourists shopping abroad comprised 30 percent of the company’s sales last year.

Source: Jing Daily

The Hurun Chinese Luxury Consumer Survey 2013 found that French luxury brands are still the most popular among gift-givers, reports China Daily.

The top three brands for women’s gifts are all from France: Chanel, Louis Vuitton, and Cartier. Six of the 15 most popular gift brands for men are also French, including Hermes and Cartier.

Why?

Most major French luxury brands have high recognition and are well respected.

“The promise of glamor, sophistication and elite status that brands like Louis Vuitton and Chanel offer is appealing to many Chinese consumers who either have become wealthy or aspire to become wealthy,” said James Roy, senior analyst with China Market Research Group.

For the Chinese, a trusted brand is important in purchase decisions, especially for gift-giving because they don’t want to lose face. The Chinese are cautious and are slower to embrace new brands. Brands need to earn their trust and that takes time.

Despite some slumping in the Chinese market, French brands remain bullish about the country’s future prospects. In April Christian Dior released its first collection specifically for Chinese customers, designed by the brand’s art director, Raf Simons, in Shanghai.  Karl Lagerfeld, designer and creative director for Chanel, brought the label’s first ”demi-couture” collection to Shanghai in 2009, and has since been courting private clients in China.

Additionally, as more Chinese shop abroad, they are getting increased exposure to French brands in Europe.

“Many Chinese consumers are buying big luxury brand products while traveling overseas. More than half of the customers in a French luxury flagship store nowadays are from China,” said Zhao Qian, a fashion consultant and CEO of the Beijing-based Inlife International Group. “The peak time for the Chinese luxury products market is still far away. French luxury brands that have managed to get a toehold in China will not give up that easily. Instead, they will adjust their strategy to shift some of their focus to the market outside China,” he added.

Source: Red Luxury

Traditionally focused on Europe and the United States, Wolford has announced new plans to speed up development in Asia. The Austrian hosiery brand has cemented its desire to develop in the country with two recent store openings in the Greater China region. At the start of April, the brand also opened its first branch in Shanghai before celebrating its fifth store opening in Hong Kong just a few weeks later.

Shanghai’s Citic Square mall is the home to Wolford’s first directly-operated store in the area. The store measures 60m² and remains true to the traditional Wolford store concept. The brand has also recently announced plans to open a second branch in the city before the end of June.

Wolford’s fifth Hong Kong address is another directly-owned store and is located in the International Finance Centre. Overall, the company is looking to open 15 new points of sale in the Greater China area by June this year. Development started in the region several years ago with the installation of corners in department store. Today, the brand is speeding up activity in China in the hope that it bears a much larger effect on turnover.

Source: UK Fashionmag

Asia has surpassed the US to become the world’s biggest retailing market, offering $3.8 trillion in sales in 2011, or 41% of the global pie. Within this feverishly expanding industry, the luxury retail sector has dominated; the number of luxury stores in China has nearly doubled over the past five years. However, for the first time, the growths of mid-range retailers have outpaced the growths of their high-end counterparts.

“This is the first time this has happened,” says Sebastian Skiff, executive director of CBRE Retail, a real-estate services firm, in Asia. “It’s only natural that after being here for so long [the luxury retailers] are likely to grow at a slower pace. [The Chinese no longer] need to drip in brands – they want a relative amount of uniqueness. There is a lot of opportunity in China with value brands – and a lot of competition there,” he adds.

And companies are also taking note of this opportunity. Gap Inc. recently announced that it will add 35 new stores to their existing 47 in China. The company’s executives also said they would consider introducing company-operated Old Navy and Banana Republic to the world’s second largest economy, as reported by Wall Street Journal. Athletic wear company Adidas AG is stocking many of its China outlets with its lower-end NEO brand to cater to more price-conscious shoppers.

“Fast fashion” brands, such as the aforementioned Gap, provide shoppers with trendy items at a much lower price than upscale luxury brands. Chen Jing, a 20-year-old who makes 3,000 RMB ($485) a month working in Beijing, says she regularly shops at H&M and Zara. “I shop for style and look for popular brands,” Ms. Chen says.

While Western brands remain popular, another trend showing shift towards cheap chic is the embracement of homegrown brands. Local brands such as Me & City, Meters/bonwe, and Ochirly also provide fashionable options at reasonable prices.

Source: Red Luxury

In an April promotional event at Ralph Lauren’s Shanghai flagship store, Chinese guests were treated to wine, hors d’oeuvres, and an up-close fashion show as part of an increasingly common strategy among luxury brands to provide VIP experiences for their China clients.

According to the website of luxury experience company Affinity China, which planned the event, the store closed up shop in order to host 30 guests who were given a look at 13 new designs shown off by models, and the party concluded with a Ralph Lauren gift bag for each guest.

Special events like this are becoming more common as luxury companies strategize ways to shine above their peers in a crowded Chinese luxury marketplace. These overtures to Chinese clients occur both inside and outside of China, and some include airfare-funded trips to make purchases abroad.

A recent Reuters article pointed out that companies sponsor trips abroad for Chinese big spenders in order to help them take advantage of the cheaper luxury prices outside the mainland, but equally important to the decision to host paid excursions is the fact that they also serve as a branding experience, providing perks such as fashion shows, artisan demonstrations, and even golf outings. In a recent interview, Jing Daily columnist and co-founder of China luxury consultancy China Luxury Advisors Sage Brennan stated, “Brands that do this best will find creative ways to demonstrate their heritage and depth of expertise and quality, while providing memorable experiences for customers.”

Brennan argued in a recent article that affluent shoppers from China enjoy these experiences because they ”derive personal pleasure and ‘face’ within their cohort when they are provided a special courtesy that conveys status from a respected brand – the more exclusive, the better.”

This strategy helps Ralph Lauren build up its brand recognition while it pursues expansion efforts in China as part of a repositioning strategy that began in 2010. “We’re on track to open 11 stores this year, plus or minus a few 20 next year,” said Roger Farah, the company’s president, chief operating officer, and director during a call with investors in February. The company is targeting a more mid-range clientele, but clearly recognizes the demand for VIP experiences across all levels of the luxury market.

Source: Jing Daily

The importance of Asia’s fashion market was front and center Thursday night as Chanel presented its 2014 resort collection in Singapore. Bruno Pavlovsky, president of Chanel fashion, told Women’s Wear Daily that Asia as a whole provides the label with ample “space to grow,” while China is the focus of a long-term, slow growth strategy for the company. He noted that Chanel is not in a rush to open stores, and that he is confident that the brand is “number one in ready-to-weary luxury sales in China.” His full comments are below:

Pressed about China, where slowing growth has been coupled with a government-driven clampdown on conspicuous consumption, he said that any blip would not affect Chanel’s bid to “still be there in 50 years.”

“China is a new business for us and we only have 10 boutiques there,” he said, adding that Chanel had only begun opening stores in second-tier cities like Shenyang in the last two years.

The executive said that the fashion house would be moving to encourage customers who had become familiar with the brand through accessories to purchase clothing, which typically commands higher prices. “We have a fashion spirit and don’t want to sell only accessories,” he said. “So we are communicating [reasons to purchase] ready-to-wear to customers. It is a bit more expensive, but there are a lot of people in China who can afford it.”

“I cannot communicate any figures,” he added, “but I am sure we are [already] number one in ready-to-wear luxury sales in China.”

This long-range thinking reiterates what Chanel Global CEO Maureen Chiquet previously expressed in a January talk at Asia Society about the company’s China plans. She said at the time:

“We don’t have the urgency to expand. We are an exclusive brand and we want to stay exclusive so it’s strategic to not be everywhere. What we are starting to learn is that like every developed market, the clients there want things other people can’t get. That’s what defines luxury in many ways so we’ve been careful, but in a very calculated way.”

Like Chanel, luxury fashion label Dior is pursuing similar slow growth strategy that involves a limited number of store openings and a focus on the high end of the luxury market.

Source: Jing Daily

Following its successful 2012 “Secret Garden” print and video campaign, Dior is rolling out a second installment, starting this weekend in the Chinese edition of Vogue. After its China debut, the print campaign will continue in Italian Elle and French Vogue.

Like last year’s campaign, the 2013 edition is centered on a short film by Inez van Lamsweerde and Vinoodh Matadin, starring model Daria Strokous. The first “Secret Garden” film, viewed some 24 million times to YouTube, featured Strokous running through the ornate salons of Versailles. This year the location is a misty forest near the Petit Trianon, a dreamlike setting inspired in part by Le déjeuner sur l’herbe, Édouard Manet’s 1863 painting of two men in suits picnicking on the grass with a nude woman. Along with Strokous, last year’s film featured Chinese model Ju Xiaowen (雎晓雯); at least one Chinese model appears in this year’s campaign as well.

Dior’s haute couture line and Dior Homme were both presented in China runway shows this spring as part of the company’s China expansion plan. Dior has been pursuing a high-end approach in order to appeal to Chinese clients who are increasingly favoring sophisticated, low-key styles over logo-heavy designs.

The campaign’s China launch follows the recent decision by Hugo Boss to globally debut its 2013 fall-winter collection with a fashion show in Shanghai later this month. These moves underscore a changing perception of China not only as a top consumer market but a significant influence on style and taste-making worldwide.

Source: Jing Daily

Taiwanese model and actress Lin Chi-ling in a still from Hugo Boss’s new video campaign to promote its upcoming Shanghai fashion show. (Hugo Boss)

German label Hugo Boss recently launched an online video campaign with a cosmopolitan flair to promote its upcoming May 30 Shanghai fashion show. The move demonstrates not only the brand’s fixed focus on the Chinese market, but also its view of China as an optimal location for debuting its designs on an international stage.

Rather than being intended solely for Chinese consumers, Hugo Boss’s runway show at the Shanghai Power Station of Art will unveil the winter 2013 collection to a world audience. Contrasted with Dior Homme’s recent China reprisal of a collection that was originally shown in Paris, the company’s choice of Shanghai to debut its new designs signals its view of China as not only a valuable market, but also a global taste-making center.

Hugo Boss’s Shanghai fashion show promotional website features two mini-webisodes entitled Shanghai Affairs, which contain elements intended to appeal to both Chinese and international audiences. The videos feature one Taiwanese and one European character (model and actress Lin Chi-ling and Spanish model Jon Kortajarena), both of whom show off the label’s collection with Shanghai’s city lights as the glamorous backdrop, in scenes targeting both local and foreign consumers.

The two episodes are intended to build global interest in the live webcast of the show, which will be available online to anyone in the world who wishes to watch. The label also incorporates social media and e-commerce strategies by marketing on several online platforms and advertising that two pieces of the collection will be available for purchase online immediately after the show’s conclusion.

After debuting its winter 2012 collection in Beijing last year in its first China show, Hugo Boss has been clear about its China-centered marketing strategies. Gerd von Podewils, senior vice president of the label, said of the choice of location, “Following our highly successful fashion show in Beijing in 2012, we are now focusing on Shanghai – and by doing so emphasizing the significance of the Asian market for Hugo Boss.”

After seeing only a four percent rise in China sales in 2012, the label has employed several strategies to catch the attention of the market, which have yielded a “gradual improvement” in sales, according to company CEO Claus-Dietrich Lahrs. Among them were the 2012 Beijing show — a high-tech, 3D event – expanded social marketing, and actor Chow Yun-Fat as a brand ambassador. In February 2013, the company embraced China’s burgeoning e-commerce market by opening its official Chinese online store.

Source: Jing Daily

Online retail sales in China increased 55 percent to RMB 194 billion ($31.5 million) in 2012 and are expected to grow 37 percent to RMB 265 billion ($42.7 million) in 2013, according to Nasdaq. How do we account for the burgeoning of expensive flagship stores in this shifting marketplace?

Some experts believe that flagship stores are instrumental in drawing consumers to new brands and, simultaneously, augmenting online sales.

“In China, flagships create an impression of a brand, and can often be used to elevate the perception of the brand’s value compared to that of the West,” said Kristin Graham, a consultant partnered with CRG, for Nasdaq. In this transitional period, flashy and expensive flagships are being used to educate Chinese consumers, and hopefully lure them to do their ordinary purchases online.

Many big stores are making their way to Shanghai. Sephora just opened their 16,000 square-foot flagship on Nanjing Road. It is the brand’s largest store. Last fall, the Forever 21 flagship moved in down the street. In the Pudong New Area, Apple put down roots for a store that mimicked the New York flagship, and got its most profitable location in the world. Japanese clothing brand Uniqlo announced it would open its largest store in Shanghai on Huai Hai Road by the end of this year.

This sort of expansion is not limited to Shanghai. Louis Vuitton placed a two-story flagship in Chongqing, a Tier 2 city. All of these brands have hoped to gain greater visibility though expensive real estate ventures, and for the moment they seem to be succeeding. “Chinese consumers are often unfamiliar with a product because it has only recently become available. Thus, many Chinese consumers today prefer to be introduced to a brand via a brick-and-mortar store since they want to physically experience the brand and product. Additionally, it is difficult to find new brands online,” said Graham.

Jack Ma, the founder of Alibaba Group Holdings, projects conservatively that online sales in China will jump to 30 percent of total retail sales in China in the next 5 years, from the current 5 percent. To this end, flagship locations will have to be more creative in their presentation, offering more than just what a consumer can get on the brand’s website. This means adding events, stylists, and strong customer service.

“Foreign retailers have found it difficult to physically expand in China, with most falling behind store count targets. To effectively capture the Chinese market, retailers should forgo aggressive physical store expansion and implement a hybrid model in which they open fancy flagship locations in major cities, but focus more on developing an e-commerce platform with strong distribution and logistics capabilities,” Graham offered.

Source: Red Luxury