Asia Ferragamo’s Largest Market
Having invested heavily in Asia — its largest regional market — over the past several years, and focused increasingly on mainland China expansion, this week Italian luxury fashion group Salvatore Ferragamo announced plans to increase its stake in China joint ventures for distribution from 50 to 75 percent over the course of 2013. This, as the AP points out, follows recent agreements with the Hong Kong-based brand management and distribution company Imaginex Holdings as well as Imaginex Overseas.
Ferragamo has expanded aggressively since entering the mainland China market in 1995, opening around 60 locations in more than 30 cities throughout the Mainland. The brand currently operates around 100 points of sale in the Greater China region alone, and launched an official online store this past October. Despite a tougher retail environment in mainland China in the third and fourth quarters of 2012 — owing to more overseas spending by tourist-shoppers in search of good deals – Chief Executive Michele Norsa has said that he expects a rebound in the months ahead.
While over-expansion has been a problem for some global high-end brands in China, particularly those with lower brand-name resonance among inland Chinese consumers, Ferragamo has built up quite a name for itself even among male consumers in third- and fourth-tier cities. This, in addition to the brand’s strong nationwide sales presence (both physical and online), social media activities, and wide product mix bodes well for the year ahead, even if shoppers in Beijing or Shanghai significantly cut back. (Which we and a number of retailers do not expect.)