Expecting China to be its largest market in five years, Italian handbag maker Furla has escalated its plans to open 100 stores in Greater China. The rollout will initially be in first and second-tier cities.
Furla opened its first retail store in Hong Kong last year and has since opened 20 stores in Greater China.
The company sees a huge opportunity for cheaper premium fashion brands given strong demand for accessible fashion in China as household incomes are expected to increase in the coming years.
Furthermore, with brands like Louis Vuitton and Gucci going with more “upmarket” pricing, this “creates a massive price umbrella in the aspirational segment,” noted Luca Solca, an analyst at Exane BNP Paribas. For example, Furla’s signature “Candy” satchel costs €295 while a similar Louis Vuitton “Speedy” bag costs €630.
Furla is seeing strong sales coming from Chinese shoppers, reports The Financial Times. The company’s sales in Italy grew by 8 percent last year, largely due to Chinese tourists.
To fund its China expansion, Furla entered into a joint venture with Fung Capital Asia, the private investment arm of the families of Victor and William Fung, earlier this year.
For many smaller Italian brands who want to grow their distribution, it is becoming popular and a necessity to enter into a joint venture with an Asian investor. Salvatore Ferragamo sold a stake to Hong Kong financier Peter Woo.
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photo credit: furla, retaildesignblog