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.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews