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Sir Paul Smith Eyes China Expansion
BEIJING — "It will not be your typical fashion show," Sir Paul Smith promised before his show and party at the gallery 798 Space here.
Located in a converted Sixties warehouse, the gallery is more familiar for controversial performance art than for catwalks and canapés. "It carries on our constant push of individuality," the British designer continued, which "is a tough one to sell in China, but to do it any other way would be false."
The designer's three-day visit earlier this month was his third time in Mainland China, although his first public trip; he came as a tourist in the Eighties, and again five years ago.
"The difference is enormous," Smith remarked during an interview at the China Club, which is situated in a traditional Beijing courtyard house. "There are lots of people, and fewer bicycles. The first time I came, it was like a river of bikes...The changes are all over outside" — he gestured out the window — "in the skyline. It's very sad, because places like this one have nearly all disappeared. In terms of fashion, though, it will be interesting to monitor how China turns out, for all of us. The big labels are investing very heavily, and are leaving us with very little choice on where to open shops."
The difficulty of finding suitable retail space — rather than the challenges of marketing individualism and dapper British fashion to largely conformist, conservative Chinese consumers — dominates the concerns of Bluebell Group, which franchises Paul Smith in China. Bluebell, a French company formed in 1954 to sell luxury perfumes in Japan, now manages 80 brands in Asia, including the distribution in Japan of the fragrances of 40 luxury brands. In China, in addition to Paul Smith, it has the franchise rights to Moschino, Blue Marine, and Alessi tableware.
In China, Blueball opened the first Paul Smith store in Hong Kong in 2001, and it now has eight outlets in Greater China, including five on the Mainland. The first of the Mainland stores was a Shanghai location in Plaza 66, opened two years ago, and stores in Beijing, Nanjing, Guangzhou and Taiyuan have followed. "The plan is to, within three years, have around 20 stores in China," said Paul Haouzi, president of Bluebell Greater China.
Finding the right locations will determine which Chinese cities the Smith label expands into next. "We'll open three more stores in September, out of four possibilities: Harbin, Shenyang, Xian and Qingdao," said Emma Boutet-Lin, Bluebell's marketing manager for China and Taiwan. The emphasis is on northern and central China, she explained, because "there is a lot of natural resources money there, and less entertainment to spend it on...Also, people there are doing business, and need to dress for it."
More adventurous tastes among northern Chinese are also a factor, added Haouzi. "The Japanese are a lot more adventurous than the Chinese but, for example, if you look at the north versus the south, the northerners are more daring. I'm not convinced the Chinese will stay conservative; I expect we'll see tremendous change over the coming 10 years."
The Smith brand hopes that northern China will follow the tastes of nearby Japan and South Korea, which are Paul Smith's largest and third-largest markets, respectively. Paul Smith has over 200 stores in Japan, and does sales of 2.5 million euros, or $3.1 million, a year in South Korea. "In Japan, we're very mass. It started in the Eighties, when we gained a cult following with designers and filmmakers," said Smith, who visits Japan at least twice a year. "We have a high image, but also a bulk audience among young people. In China, we try to appeal to young people who are traveling some, and know something about the world." He said that one of the surprises of the trip came during an impromptu visit to his Beijing shop, where "we were actually selling, and all the customers were Chinese. I thought a lot of our buyers here would be expats, but they're not."
"Our products are expensive, so, obviously, our target consumer is people who can afford them," said Haouzi. "For men's wear in China, the biggest sellers are the more conservative tailoring, like Zegna, with nice, conservative suits. Our people are looking for nice suits, but with a twist, like people in the design industry, art, media; musicians, creative people."
A party for Paul Smith on April 10, at the house of publisher Hong Huang, was attended by members of Beijing's art, music and film scenes, including rock music pioneer Cui Jian.
Men's wear accounts for 55 percent of Paul Smith's China business — women's wear represents 30 percent and accessories, 15 percent — and the Guangzhou and Taiyuan stores carry only the men's line, as will the three stores opening in September. "It's due to location size, because we need more space to carry both [men's and women's]," explained Haouzi. "You see more men's wear sales in smaller cities than in the big ones. China is still very men's wear oriented, and that is more clear in the smaller cities. In the big cities, China's abnormal situation with men's wear leading changes back to women's.
"For China, the challenges for different brands are all pretty much the same," continued Haouzi, a 20-year Asia veteran. "Apart from a few big names, we have to build brand awareness. It's a new market, so we must build a foundation. But I'm very confident....Even now, it's getting more mature, the price difference is shrinking, the merchandise offerings are also changing. There's a huge potential because more and more people want and can afford fashion."
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