By  on February 22, 2012

HONG KONG — G-Star Raw commercial director Camiel Slaats said the Dutch denim brand has seen 20 percent compounded annual sales growth in China since it entered the market in 1996, as the company opened its second flagship in the city.

"Our growth has been very healthy from start to now," Slaats said. "We are adding five to 15 shop-in-shops and monobrand stores per year, and we are now in all the main cities. "The Chinese consumer is getting more fashion-conscious, and there is a bigger group of Chinese consumers who are looking at fashion and denim products."

G-Star currently has about 200 outlets in the country. Its next flagship opening will be in Shanghai in October. Slaats said G-Star had opened five to 15 points of sales per year in China since it entered the country and that its target was to do the same every year for at least the next five years.

The executive declined to state the sales volume for last year but denim sales remain low compared to other apparel categories in China. According to the China National Commercial Information Centre, denim wear made up just 1.2 percent of the total sales volume of all apparel types in the first half of last year.

Slaats, however, was confident in demand for denim in the country. "There are many more people in China trying on denim products every year, and they become loyal," he said.

The Amsterdam-based brand, which has over 6,000 points of sales in 70 countries, unveiled Tuesday the 5,651-square-foot, two-floor flagship in the popular shopping district of Causeway Bay as part of its global expansion plans. It is G-Star's second store in the city, after the first opened last year.

Performers in denim-blue costumes leapt through a Chinese dragon dance to usher in the opening before a curtain dropped to reveal a piece of six-story steel cladding on the store's outer wall bearing G-Star's name. The ceremony drew crowds, temporarily disrupting traffic.

Musician Skylar Grey, Australian actor Gracie Otto and model Alexandra Agoston were a few of the VIP guests who mingled inside the spacious gray-and-white interior.

Slaats said Hong Kong was a multicultural hub that would provide G-Star with exposure to the Mainland Chinese, European and American tourists who came, as well as local residents.

G-Star joins other foreign fashion brands like Forever 21 and Jack Wills which are paying top dollar for an eye-catching street-level presence in the city, which real estate services firm CB Richard Ellis said in November was the world's second-most expensive location for shop rents.

Slaats said the rent was "premium, but therefore we get a premium product."

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