SHANGHAI — Value Retail’s opportunity in China lies in capturing emerging middle- and upper-class consumers who are seeking access to luxury goods but are not yet able to afford full-priced products in high-street stores, Burt Tansky, vice chairman of Marvin Traub Associates and the former chairman and chief executive officer of the Neiman Marcus Group, said while on a trip here this week.
Tansky is a strategic adviser to Value Retail, the developer of the nine Chic Outlet Shopping Villages in Europe, which is also developing two outlet malls in China. Suzhou Village, the first location near Shanghai, had its soft opening in May and will have its grand opening in October. The second property, Shanghai Village, is located on the now-under-construction site of the Shanghai Disney Resort and will open next fall.
“Outlet malls are very good for brands because it allows people who know the brand to understand it and appreciate it but cannot afford it [full-price] yet,” said Tansky, who was in town touring Value Retail’s properties as well as other outlet malls in the area.
“They can enter the brand at a lower price, and as they move further up the economic scale, they will move to the full-priced brand,” he added. “I think the customer the Villages are aiming for will clearly come out and shop. I think word will spread very quickly that it is different and very special.”
In addition to visiting retail locations, Tansky met with a number of brands that have opened or are planning to open in Value Retail’s locations. He said one overarching theme from tenants is the need to have ample food and beverage offerings. “It seems to be an important piece,” he said. “They feel the Chinese consumer wants to be able to come and spend the day, have lunch and dinner. We keep hearing the Chinese consumer would appreciate that.”
As for potential risks in the market, Tansky said oversupply of retail space is a concern. “You can’t build malls every thousand feet and expect everyone to prosper, so I think that is one of the great risks,” he said. “But I think it is a risk in any category.”
During a trip to Shanghai in April, Scott Malkin, founder and chairman of Value Retail plc, said there are plans to build up to seven outlet malls in China. He said Suzhou Village will be aimed more at domestic tourists while the Shanghai development will have more of an international orientation, aiming to capture Chinese and overseas visitors.
“Shanghai Village is meant to be an Asian hub while Suzhou Village a Chinese national hub,” he said. “They will naturally complement each other. Certainly the brands see it that way.”
Malkin said while most brands are enthusiastic about the Village concept entering China, there is a certain degree of schizophrenia among those in the market where various factors, ranging from government policies to changing consumption habits, have resulted in a much different competitive landscape from only a few years ago.
“Some brands want it now. Some might think it might be a waste of time,” Malkin said.
“Every decision is painful and cautious compared to two years ago where you just did more because you did not have time to think. Now you really have to have a business here,” he continued. “They are in a period of transition, so on the one hand, we are embraced, but on the other, we are just another headache. We are about surplus so always a bad news story, and we are here to give them a service for something they don’t want to think about if they can help it. But they have to think about it. They have to set up and run their businesses as powerfully and as sophisticated as they run them in Western countries.”
As for up-and-coming luxury markets, Tansky said he feels like China is here to stay but that other hot spots to watch include Vietnam, India, Thailand and Africa.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty