By  on April 6, 2007

SHANGHAI — Aquascutum is updating its image in China.

The British brand, which is reinventing itself under chief executive officer Kim Winsor, held a fashion event at Children's Palace here early in March to showcase its spring collection to an elite audience of local film and business figures.

"China is a very important market, and Shanghai is where it's happening: everyone is talking about it," said Takaaki Kawashima, chairman of Aquascutum during his visit here last month. "We lead fashion, so we go where it's hot, throwing a big event with a heritage building and a catwalk."

The event, which included a runway show, was aimed at bringing the image of Aquascutum's women's and men's wear in China in line with the rest of the globe.

Aquascutum has 46 stores in Greater China — 16 in the Mainland, 19 in Taiwan, and 11 in Hong Kong and Macau, plus another 49 wholesale points, said global marketing manager Kirsten Kilby. All are run by the brand's licensee, YGM Trading in Hong Kong. Greater China sales are dominated 60 percent by women's wear, said Kilby. Kawashima added that on the Mainland, however, men's wear remains the primary business.

Kawashima said Aquascutum generates revenues of $400 million worldwide in retail, of which $60 million is from the U.S. and Europe, $240 million from Japan and $100 million from the rest of Asia. "China is a growing market, although in recent years, it has not been growing that much for us, but it was only last year that we started a strategic focus on the China market," he said. "The size and magnitude of this market will soon be totally different."

Kawashima admitted Aquascutum's brand recognition in the Mainland remains low compared with elsewhere in Asia. "Hong Kong is an established market for us, and the window to Mainland China, plus it has a historical connection to England, but the dynamic market is here."

To tap it, he believed, will take stressing the brand's traditional British image. "Royalty is an iconic symbol. With China's growth, it is producing a new class of powerful people — not necessarily rich, but influential in business and politics. They wear Aquascutum to show their power, such as at meetings, and in negotiations. There is an increase of people in power, and Shanghai is the symbol of this."The company's China expansion will "start with the coastal power cities, like Shanghai, Beijing, Guangzhou, Dalian, but all of the provinces have their own power people," he continued, adding that Dalian is a big market for the brand because of the cold climate, and because of Aquascutum's success in Japan, which influences Dalian.

"The launch of this collection, with more dresses, feeds into where we're headed," explained designer Graeme Fidler, also in Shanghai for the event. "Dresses used to be like two out of 400 pieces in a collection. We're not masters of dresses, but we now have dresses, so if we want to, we can do all dresses for one season, and do none the next.

"Casual products dominate at the moment [in our China stores]," Fidler continued. "Like the cashmere coat is a focus in England, but not here. Less tailoring is done in-store," reflecting the Chinese tradition and popularity of private tailoring. "Coats, raincoats and tailoring, the focus of our themes, do not exist here."

What moves instead in Aquascutum's China stores are polo Ts, casual suits and jackets and some signature raincoats. "The current casual sensibility here is different from what we want to be," said Fidler. "We need to reeducate our existing customers, and get new ones.…You'll see a shift in what is in our stores in the next two years. We don't know how that will impact sales."

According to Fidler, Aquascutum's China merchandise is mostly produced domestically by its licensee. "YGM produces 85 percent of the product themselves and 15 percent from London or Italy. But we'd like it to be more like 50-50."

The company also developed its knitwear line in China.

"Our name recognition can be much bigger here," Kawashima admitted, but nonetheless, "piracy has always been a headache for us. We see it from Hong Kong and Guangdong all the time. It is the sign of being a luxury brand. Currently, we're fighting with one brand in Hong Kong that is calling itself 'Aquatongtong' or something like that. This is pretty typical.

"Our base remains important, but we need to expand from there," added Kawashima, referring to the Chinese and global client. "Our loyal customers get older, so we need to reach younger people more, but we're not a teenager brand."

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