Part Of Plan To Open Three New Mainland China Locations By End Of 2014#
Originally announced in 2011, the China expansion efforts of Hong Kong-based luxury department store
Lane Crawford#
are set to gain pace with the opening of two new stores in Shanghai and Chengdu by the end of this year. Joining its two existing Beijing locations, by August the company plans to open a 150,000 square-foot location in Shanghai, with an 82,000 square-foot store location in Chengdu set to follow in December. Investment in the Shanghai property alone is estimated at US$64 million.
Putting aside the fact that the new locations have been in the pipeline for two years, Lane Crawford's continued brick-and-mortar expansion into the Mainland is no surprise. Last year, the company pulled in a whopping $700 million in revenue, with complete store growth of 23 percent. For the last fiscal year, according to Lane Crawford president Andrew Keith, the company recorded double-digit growth, powered by strong physical store as well as e-commerce sales that have stayed reliable owing to continued spending by Chinese tourist-shoppers in Hong Kong.
Lane Crawford's first branch in mainland China, which opened at Beijing's Seasons Place in 2007, has also been a jewel in the company's crown, with Andrew Keith emphasizing that "its annual performance is really beyond expectations.”
One reason Lane Crawford's expansion into the Mainland in general, and Chengdu in particular, is important is that the company brings with it a well-curated, sophisticated brand mix (e.g., Lanvin, Alexander Wang, Stella McCartney) that fits with the changing demands of China's increasingly designer-savvy, style-savvy consumer. In Chengdu -- which, unlike Shanghai or Beijing, does not yet have dozens of independent multi-brand boutiques stocking niche luxury designers from around the world -- Lane Crawford will be the first to offer dozens of luxury brands to the market. In terms of design and marketing, the store will certainly stand out in the sprawling city of over 14 million. Known for its edgy and artistic appeal, Lane Crawford has always gotten attention for its innovative interior design and digital prowess. Recently, Lane Crawford held a competition encouraging fans to design their own S/S 2013 campaigns, which went over extremely well in the region.)
Even far from Beijing's current austerity push and crackdown on conspicuous consumption, more discreet (yet still solidly luxury) brands will benefit the most this year, powered by China's increasingly sophisticated shoppers, more of whom are buying more discreet high-end brands with a greater emphasis on materials and craftsmanship.
These changing tides, as well as a preference for multi-brand department stores among Chinese luxury consumers who shop at home rather than abroad, will boost Lane Crawford's Chengdu location in particular. But another key to the retailer's popularity in China is its clever use of brand partnerships, working with celebrities with serious followings in the region. Having worked with Victoria Beckham last year in Hong Kong, Lane Crawford just might end up becoming a key part of the singer-turned-designer's plans to crack the mainland China market this year.