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The Top 10 Stories of 2004: 5. The Asian Promise

A host of luxury and fashion brands looked east in 2004. Labels such as JLo and Giorgio Armani opened stores in emerging markets like Russia and China, while other fashion names, such as Pucci and Coach, inaugurated flagships in Japan. <BR><BR>“I...

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A host of luxury and fashion brands looked east in 2004. Labels such as JLo and Giorgio Armani opened stores in emerging markets like Russia and China, while other fashion names, such as Pucci and Coach, inaugurated flagships in Japan.

“I don’t know that the Chinese realize how futuristic Shanghai is, how much more avant-garde it is than, say, New York was, or Chicago, or Paris, or any of these other big cities,” said Giorgio Armani on his first trip to China in April to fete his first store in Shanghai and outline plans to open 20 to 30 stores in that nation by 2008.

Armani is hardly the only luxury brand looking to cash in on China. In September, Louis Vuitton christened a 9,700-square-foot unit in Shanghai, its largest store in China. Prada and Dolce & Gabbana opened Hong Kong flagships and said they’re earmarking China for growth.

“There’s no real heritage of brand names here, so Chinese consumers don’t differentiate much between the luxury brands and the upstarts,” said Chris Torrens, editorial director of consulting firm Access Asia. “Anyone can be a luxury brand in China if they market the right image.”

Luxury and fashion brands also are sizing up Russia as a future revenue driver. In May, the world’s first JLo by Jennifer Lopez boutique opened in Moscow’s luxe Crocus City Mall. Burberry inaugurated a 4,000-square-foot store and Louis Vuitton unveiled a boutique in Moscow’s GUM department store opposite Red Square. Moschino also opened a store in GUM this year. Chloé entered the Russian market with an in-store shop at Crocus City and is planning a stand-alone store in downtown Moscow for next year. “It’s a very fashion-driven clientele — they love color, print, patterns — and have a more bold approach to buying,” Burberry ceo Rose Marie Bravo said at the flagship’s opening.

Far from an emerging market, Japan also has seen its share of new stores this year as luxe brands continue their drive to become entrenched in the Japanese market. In 2004, Christian Dior opened its largest store in Asia, a 10,300-square-foot flagship in Tokyo’s Ginza district. It plans an Osaka unit for next year. Bulgari opened a 9,150-square-foot store inside Osaka’s Hilton Plaza shopping center. It is the jeweler’s biggest store in Japan and its second-biggest in the world.

It was also a big year for Pucci’s signature swirls. The brand opened a Ginza flagship and three in-store shops in major department stores. Just this month, Chanel opened one of its largest stores in the world, a four-story, 66,000-square-foot building with three floors devoted to retailing in Tokyo’s Ginza district.

There are still many Japanese store openings on the horizon. This month, Tod’s will pop the cork on a 27,448-square-foot palazzo — complete with store, offices and a rooftop garden — in Tokyo’s Omotesando district. Banana Republic said it’s entering the Japanese market and expects to open three stores next year. Coach also plans to open a flagship in Sendai this month after feting a new Osaka flagship last month.

“Let’s not forget that Japan is still the largest luxury market,” Bulgari ceo Francesco Trapani said. “It’s an enormous market that in some ways is mature. It’s sophisticated, and Japanese clients are not only buying products but really buying a concept, a lifestyle behind it.”

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