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Shanghai Surprise

Market Center Management is expanding its apparel empire beyond Dallas and Los Angeles and entering one of the world’s hottest markets: China.<br><br><br><br>In yet another link between American and Chinese apparel industries, Dallas-based Market...

Market Center Management is expanding its apparel empire beyond Dallas and Los Angeles and entering one of the world’s hottest markets: China.

In yet another link between American and Chinese apparel industries, Dallas-based Market Center Management Co. in July signed a 10-year deal to manage the ShanghaiMart, Asia’s largest international trade mart.

MCMC, which already operates the Dallas Market Center and the California Market Center, will oversee leasing, marketing and business development for the 3 million-square-foot ShanghaiMart campus. The three-year-old complex includes a 30-story office tower, two exhibition halls and a 2,000-unit showroom facility. The facility will continue to be owned by the Hongqiao Economic & Technical Development Zone United Development Co. and real estate holding company Continental Land Development.

MCMC executives declined to estimate the project’s cost, but Bill Winsor, president and chief executive of MCMC, pointed out the building does not need significant renovation. Observers speculated that ShanghaiMart’s owners, however, are likely to plow millions into the project, a chunk of which will be the 10-year management contract with MCMC.

MCMC executives said their primary goal is to facilitate sourcing by consolidating factory representatives, textile companies, brokers and other service providers in one location.

“With trade barriers coming down in 2005, retailers are really stepping up their efforts to produce overseas,” noted Winsor. “Many have offices in Hong Kong, so going over to the mainland to visit a number of factories is extremely time consuming.”

In an effort to woo major retailers like Target and Wal-Mart, MCMC management will hire compliance experts to certify factories before they are allowed to lease space in the mart.

MCMC also hopes to use ShanghaiMart to introduce American labels to the rapidly westernizing Chinese market through Shanghai editions of trade shows they already host in Dallas and Los Angeles. U.S. companies can also open showrooms in ShanghaiMart.

The mart is just over half occupied with vendors of textiles, apparel, accessories, gift, furniture and building supplies.

Cindy Morris, MCMC’s chief operating officer, said the company will be “restacking” these existing tenants to clump related industries together, following the Dallas model. She said they will also pursue toy vendors, since there are many plush-toy factories nearby.

This story first appeared in the October 10, 2002 issue of WWD.  Subscribe Today.

Industry executives were positive about the project citing it as potentially invaluable for U.S. companies piecing together strategies for tackling China.

With imports of Chinese fabric and apparel rising steadily and competition for reliable factories intense, everyone is eyeing the nation as a sourcing center — and an untapped consumer market. In 1998, the latest year for which figures are available, the volume of retail sales of consumer goods in China was $353 billion, according to the U.S. State Department.