For more than a half century, one family has been synonymous with high-end retail in the Philippines — the Tantocos.
The first generation, Gliceria and Bienvenido Tantoco Sr., began Rustan’s in 1952 as a modest gift shop in Manila stocked with interesting and elegant products they picked up from their travels abroad. Today, Rustan’s is the country’s premier department store chain with prime locations in key cities. And the empire includes supermarkets and boutiques, as well as department stores with in-store shops for luxury brands.
The Tantoco children and grandchildren are actively involved in the family business. The full-fledged expansion into luxury retail has been spearheaded by Stores Specialists Inc., a wholly owned subsidiary of Rustan’s.
Anton Tantoco Huang, a third-generation family member, is executive vice president of Rustan Commercial Corp. and SSI. Explaining the impetus behind the establishment of SSI some 20 years ago, he said: “With the advent of the malls, the desire and need to go beyond the department store concept to target the luxury customer was too compelling.”
SSI has partnered with 56 brands, and its portfolio of prestige luxury labels includes Tiffany, Cartier, Gucci, Prada, Bottega Veneta, Marc Jacobs, Ferragamo and Tod’s. Many of their freestanding boutiques can be found in the posh Greenbelt complex in Manila’s central business district of Makati.
It has been an uphill climb for SSI. “Admittedly, it used be a challenge to sell the Philippines as a potential market opportunity for these international fashion brands,” Huang said. “But over the recent decade, with the increasing sophistication of that slim but strong upper market segment and growing aspirational middle class, more and more brands have shifted their focus toward us and have wanted to expand in this region. Now I can say it’s not uncommon for us to actually be approached by brands aware of the potential here in our country.”
While Huang concentrates on developing SSI beyond the department store concept, another young Tantoco descendant, Eman Pineda, seeks to refine it.
Forging a path separate from his family, Pineda this year opened Adora, a 25,000-square-foot store in Manila’s Greenbelt 5. It is a retail showcase featuring limestone floors, modernist furniture and velvet draperies. Adora already has set a benchmark in the market in terms of luxury and personalized service.
“Adora seeks to find its own niche in the department store-multibrand format, giving its own specific offer in terms of a departmental mix — i.e., from home to beauty to travel to watches to fashion [ready-to-wear], shoes and bags,” Pineda said. Concentrating on these departments alone is a departure from the traditional concept of having everything under one roof.
Within these departments, Pineda said, Adora aims to offer merchandise that is more directional. The watches department, for example, sells brands that have very distinct character, but are still not yet in the mainstream, such as TW Steel or Meccaniche Veloci. As for rtw, Adora carries a full range of brands, including Jil Sander, Etro, Marni and Missoni.
Pineda emphasized that Adora makes its selections with the customer in mind, “really editing those collections for its customers.” Moreover, “the choices of merchandise need to be well thought out and have a compelling reason to be in the store because the space allocation for it needs to be profitable, as well.”
Both Huang and Pineda acknowledge that the Philippine luxury market is relatively small, albeit influential. “It is difficult to achieve economies of scale with just a few brands,” Huang said. “Thus there are a few players with a multibusiness format.”
The market has matured, Pineda said, “but it still continues to develop, far from it having peaked. However, it will never be at the same level as a Hong Kong or Singapore.”
Mark González is an independent player whose successful Homme et Femme multibrand boutique introduced Azzedine Alaïa, Stella McCartney, Y-3, Lanvin and Dior Homme to the Philippines. Recently, he opened a freestanding Balenciaga boutique in Greenbelt 5. He considered the luxury market to be “at infancy age still,” and noted that merchandise tends to be accessories-driven, hence the offering at his Balenciaga store, which is limited to shoes, bags and accessories. “The bags are our bestsellers,” he said.
One reason for the strength of accessories in this market, Huang said, was “the price-versus-perceived value proposition.” Even this is slowly changing, however, “with the ever-increasing sophistication of the Filipino consumer and their desire to be in tune with each season’s collection,” he continued.
Pineda also cited “the strong culture of made-to-measure/made-to-order designer pieces from local designers” as another factor.
“The market is still new in terms of luxury rtw,” he said. “It will definitely change, in time, and luxury rtw will grow, but it takes two: the retailer to understand who the customer is and what he wants, and the customer to rely on the retailer for the needs [and] wants per season and understanding that the offer in Manila can be at par with the offer abroad.”
Though official Central Bank figures show that consumer prices increased at a slower pace in September, with the current turmoil in the global markets, the country’s economic growth forecast for this year has been revised to 4.4 to 4.9 percent growth from about 6 percent.
Yet retailers said business continues to grow. Bea Valdes, designer of an eponymous line of bejeweled evening bags and accessories available at Barneys New York and worn by the likes of Rachel Roy, said, “We are at an interesting point in Philippine retail evolution. In this new landscape, with an influx of international luxury brands, you have both local and foreign brands under one roof. So, ultimately, the consumer wins.”
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