In 2007, British fashion brand Paul Smith tried and failed to crack into the Chinese luxury market. After he retreated, Sir Paul called the Chinese market “extremely dangerous” due to high rents and customers who didn’t understand Western fashion trends. Now, Paul Smith is trying it again, this time partnering with Hong Kong-based ImagineX to open a 5,000 square foot flagship store in Shanghai.
Torsten Stocker, partner at strategy consulting firm Monitor Group, said Paul Smith should also fare better in China now because of changes in taste. Chinese consumers have been exposed to different brands through the Internet and travel, for example, and increasingly want to express their individuality, he said.
Through its partnership with ImagineX, Paul Smith will open 24 stores in the next five years, the first in Tianjin in September. ImagineX, which specializes in introducing Western brands to China (and serves a sister company of Hong Kong’s Lane Crawford department store) will run the Paul Smith operations as a franchise.
Alice Wong, executive director at ImagineX, said today’s market was bigger and more mature than the one which defeated the brand in 2007. A McKinsey report last year projected that Chinese luxury consumption would grow 18 per cent annually and account for 20 per cent of the global market by 2015. Paul Smith already boasts successful stores in Asia, with locations in Hong Kong, Singapore, Taiwan, the Philippines and Korea. In Japan, sales increased 5 percent last year at its more than 200 franchise stores. The brand is hoping to replicate that sort of success in China and remains optimistic.
“Before, there was a bit of a clash of conservative, conformist Chinese tastes with the more individualistic and adventurous feel of Paul Smith designs, with its typical British quirkiness and eccentricity,” Stocker said.