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The China Edit | Frugal Is Now Fashionable, Alice + Olivia Expands, Berluti's Maison, E-Tail Revolution

The China Edit is a weekly curation of the most important fashion business news and analysis from and about the world’s largest luxury market.
Citygate Outlets | Source: Swire Properties
By
  • Lina Lee

"On Fleeting Hong Kong Trips, Chinese Make Frugal Fashionable(Reuters)

Hong Kong-bound Mainlanders are no longer solely focused on luxury retail, diversifying their shopping jaunts towards mid-priced contemporary retailers and increasingly, suburban outlet shopping malls. Off-price outlets like Citygate in the satellite town of Tung Chung and New Town Plaza near Sha Tin District posted 22 percent sales growth in the first quarter, outpacing single digit increases in city centre malls. As regional travel becomes increasingly accessible for a wider subset of China's middle class, the patterns and tastes of inbound travellers will continue to evolve. Of the 35 million Chinese nationals who visited Hong Kong last year, 20 million made day trips, often shopping the likes of Levi's, Coach and Polo Ralph Lauren at outlet destinations like Citygate. In light of this trend and staggering retail rents in the prime city centre (ranked once again as the world's most expensive by CBRE), retailers are likely to re-evaluate their regional site selection strategy.

"Alice + Olivia Embarks on Greater China Expansion with First Store in Hong Kong(Red Luxury)

Alice + Olivia by Stacey Bendet has confirmed a strategic partnership with Hong Kong's ImagineX Group to expand its presence across Greater China. The NYC-based label was first introduced in the market in 2008 through Lane Crawford and is reportedly one of the best performing brands at the latter's Hong Kong and Mainland locations. ImagineX and Lane Crawford are both part of The Lane Crawford Joyce Group, with previous experience distributing brands such as Ferragamo, Donna Karan, Marc Jacobs, Paul Smith and 3.1 Phillip Lim.

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The partnership aims to open 23 stores across Mainland China, Taiwan, Macau and Singapore by 2018, beginning with a stand-alone shop at the IFC Mall in Hong Kong next month. ImagineX vice chairman and CEO Balbina Wong believes the brand has enormous potential with the Asian consumer, with its feminine yet eclectic aesthetic that has already been translated into a proven retail concept.

"Berluti Opens Its First Maison in China" (Jing Daily)

Berluti, 'Boot Maker since 1895,' has evolved rapidly beyond its roots since joining the LVMH fold in 1993. In a series of strategic manoeuvres over the past year, the Paris-based, Italian-heritage leather goods maker helmed by Antoine Arnault made headlines for recruiting former Z Zegna creative director Alessandro Sartori and acquiring storied French made-to-measure label Arnys to reinforce its ready-to-wear offering. It is once again in the spotlight, this time for a retail strategy that prioritises Asia over traditional luxury markets. The brand has opened a 3,700 square foot shop at Shanghai's IFC Mall, its second location in the city but the first qualified 'Maison' in the Mainland to offer the full product range of footwear, leather goods and ready-to-wear. Counting its nine other locations across Beijing, Tianjin, Chengdu, Hangzhou, Shenyang, Ningbo and Hong Kong, Berluti's China presence already exceeds its footprint in Europe, where it operates six locations.

"China's E-Tail Revolution(Project Syndicate)

China's combined e-commerce turnover reached $210 billion in 2012, second only to the US. The two markets are similar in that online sales makeup roughly 5 to 6 percent of total retail sales, yet with broadband penetration at a mere 30 percent and mobile payment platforms only in their infancy, China’s upside opportunities are evident.

According to Richard Cooper, professor of international economics at Harvard University, and Richard Dobbs, director of the McKinsey Global Institute, Chinese e-tail is shaped by different forces than in the West. As opposed to cannibalising traditional retail, online sales supports incremental consumption; a McKinsey study estimates that $1 transacted online will go on to generate an additional $0.4o through offline channels. As the barriers to brick and mortar entry – scarcity and prohibitive costs of prime real estate – increase, both domestic and foreign entrants are expected to shift investment towards self-operated and third party virtual storefronts.

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