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Beijing Store Spikes Choo’s Asian Business

Despite a reputation for conformity, Chinese fashion consumers are looking to declare their individuality...

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BEIJING — Despite a reputation for conformity, Chinese fashion consumers are looking to declare their individuality, Jimmy Choo founder Tamara Mellon noted during her visit to Beijing late last month to open the brand’s first boutique in the city.

This story first appeared in the May 5, 2008 issue of WWD.  Subscribe Today.

“The Chinese are so fashion-forward, really on-trend, and a lot more than I expected — they all looked great,” Mellon said.

The store opened April 24 with an in-store party followed by a dinner.

“Our base here really is the customer who loves fashion,” said Choo chief executive officer Joshua Schulman. “China is not like the other Asian markets, with their more uniform attitudes. They really want to be special. It is not about the basic product. A lot of women in New York buy our classic styles as work clothes, but here, they are very fashion-driven.”

Peter Harris, president of Pedder Group, Jimmy Choo’s regional partner for Hong Kong and Macau, said, “Chinese customers are very curious, very open to new things and to taking new things and making them their own.”

The visit marked Mellon’s first to the capital and her second to Mainland China. In 2001, she visited Shanghai, where the country’s first Jimmy Choo store launched last year at Plaza 66.

“In Shanghai, seven or eight years ago, it was completely different,” Mellon said. “They only knew of Jimmy Choo from ‘Sex and the City.'”

She recalled her impressions of Shanghai’s art district and Three on the Bund, which had then only just opened and was the first luxury shopping and dining complex on the Bund.

The new 1,200-square-foot Beijing store is located in China World, one of the city’s most established luxury destinations.

“China World is the first and most important foothold,” Schulman said. “The city can handle more than one store, though.”

Harris noted that, while Beijing’s high-end retail space has “doubled in the past six months,” adding the new Seasons Place and Shinkong Plaza to stalwarts China World and the Peninsula, China World remained the best location in terms of foot traffic and sales.

“We spend a lot of time looking at stores,” he said. “China World has the historical hold. Of course, the market now has a dilution in terms of retail spaces, but it forces all of them to lift their level.”

The Hong Kong-based Pedder Group is the footwear and accessories division of the Lane Crawford Joyce conglomerate and Jimmy Choo products also sell around Asia through its On Pedder stores.

“China is one of the most important markets in the world. We’ve been talking about coming here for a while,” said Schulman. “It speaks to the importance of China as an emerging market that the whole team came here. This is the only place in the market that we are doing so this year. Today, there are more and more Mainland Chinese at our stores. We see them internationally, as well as at home. They don’t want it watered down.”

Jimmy Choo also opened its first Macau store last month at the Four Seasons Hotel in the Venetian. The brand plans to grow to a total of eight Mainland and two Macau outlets in the next several years, said Schulman, adding: “Although, obviously, we are just getting started.”

The openings form part of a larger regional strategy to expand from the current 18 to a total of 40 stores in Asia. Jimmy Choo also has two freestanding stores in Hong Kong and one in Taipei, Taiwan, all operated in partnership with Taiwan’s Bluebell Group, which manages the brand in Japan as a joint venture, as well. Other Asian shops include five in South Korea, two in India and one each in Thailand, Indonesia and Malaysia.

According to Harris, 15 to 20 percent of Jimmy Choo shoppers in Hong Kong are from the Mainland.

“Originally, they came from Shanghai and Beijing, but now more and more are from the second-tier cities,” he said. “Obviously, in Hong Kong they are important. Shanghai’s wealthy come to Hong Kong to shop. [Opening Mainland stores] is meeting a demand. In a survey we conducted, Jimmy Choo was one of the top three most sought-after brands. The other two were ready-to-wear.”

Jimmy Choo should be well positioned for China’s accessories-driven fashion market. But items such as bags, eyewear and scarves traditionally outperform women’s footwear. The uneven sidewalks of Chinese streets and the overpolished marble of its mall floors are not exactly stiletto-friendly.

“It is true: In a way, Chinese consumers are very practical,” Harris said. “For example, we do a great boot business in Beijing.”

He stressed the importance of offering a range of styles in addition to the brand’s signature stiletto.

“In fact, the original DNA of Jimmy Choo is being known for great boots,” he added. “In Shanghai, we have been very pleased. We have seen [that] a larger percentage of volume is shoes and we want balance.”

Harris said shoes are about 70 percent of sales, and handbags, about 30 percent.

Jimmy Choo’s other positional challenge is establishing its identity as a British brand with an ethnic Chinese name best known through an American television series in a market where national origin ranks high in importance. Harris and Schulman maintained that it is possible to appeal to Chinese racial pride and the ideal of English luxury simultaneously. In China, the line is also marketed under Choo’s Chinese name, Zao Jinmei.

“Unlike other brands, we don’t have to train our local sales staff how to say the name,” Harris said. “We position Jimmy Choo as a British brand, London-based, as the only British luxury footwear brand.”

While other concerns are more pressing, such as the current backlash against foreign countries and brands, he said, “We don’t worry — we’re not a French brand.” Mounting inflation, he said, means that “the cost of doing business in China will rise significantly. That will hit our operating cost and profits. Regardless, we have the long-term objective to position ourselves here.”

Harris identified the largest challenge in China as structural. “The most important thing is monitoring and maintaining our credibility and consistency, in every part of the business,” he added. “In China, this is a big issue. A lot of things after they start in China can go in two ways. Once you create an environment, you must maintain certain consistent elements. The brands that are most successful here all apply this.”

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