jamey shrillness: Luxury Conglomerates Increasingly Investing in Chinese Brands

Wednesday, December 12, 2012

Luxury Conglomerates Increasingly Investing in Chinese Brands

December 10, 2012, 6:42 pm

Luxury Conglomerates Increasingly Investing in Chinese Brands

Yesterday, French luxury goods conglomerate?PPR announced that it has purchased a majority stake in Hong Kong-based?fine jewelry and watches label Qeelin. The brand currently operates 14 boutiques worldwide, with 11 located in Hong Kong and China. PPR?s CEO Francois-Henri Pinault says that Qeelin ?shows strong potential in China and beyond? and plans to accelerate the brand?s expansion with more store openings.?The jewelry company is the only Chinese label in PPR?s portfolio but the conglomerate says that it will continue to look for more?investment opportunities in the market. In recent years, other luxury goods companies such as Richemont, Herm?s, and LVMH have also invested in Chinese luxury brands.

Affluent Chinese consumers have traditionally favored Western labels but that may be slowly changing as their tastes evolve. In 2010, Herm?s created a Chinese lifestyle label, Shang Xia, which sells apparel, jewelry and furniture inspired by the country?s heritage and culture.?Patrick Thomas, CEO of Herm?s International, says that the company will invest??tens of millions of Euros? into developing Shang Xia and even expects it?eventually to overtake Herm?s sales in China.?Earlier this year, LVMH paid $200 million for a 10% stake in Chinese high-street label Ochirly, it?s first investment in a mainland Chinese fashion company. In 2007, LVMH also acquired Chinese distillery?Wenjun.

Investors in Chinese companies are not trying to change them or Westernize them ? rather they expect the ?Chinese DNA? of the brands to be the main appeal for the domestic market. More than half of Qeelin?s clients are mainland Chinese and Pinault says that he expects the brand to do well because it ?speaks more to a Chinese clientele, given that it uses the codes and tradition of that culture.? Pinault may be right, if he expects Qeelin to perform anything like Richemont?s Shanghai Tang. The Hong Kong-based luxury clothing label, which is also heavily?inspired by traditional Chinese aesthetics, sees its Mainland customers vastly outspending?the global average.

This entry was posted on Monday December 10, 2012 at 6:42 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Yesterday, French luxury goods conglomerate?PPR announced that it has purchased a majority stake in Hong Kong-based?fine jewelry and watches label Qeelin. The brand currently operates 14 boutiques worldwide, with 11 located in Hong Kong and China. PPR?s CEO Francois-Henri Pinault says that Qeelin ?shows strong potential in China and beyond? and plans to accelerate the [...]
Consumers might be willing to stand in long dressing room lines or even queue overnight outside stores for a good sale, but research shows their tolerance for waiting is much, much lower online. A new survey from Brand Perfect shows that slow load time is the number one reason consumers are abandoning their e-commerce shopping [...]
Luxury conglomerate Labelux Group ? parent company of?Bally, Belstaff, Jimmy Choo, Solange Azagury-Partridge and Zagliani ? has launched its own blog called The LiP,?short for Luxury in Progress. ??Luxury in Progress is a concept that has defined the Labelux process since our inception,? said Reinhard Mieck, chief executive officer of the group. ?We thrive on [...]