HONG KONG — As it fans growth in Asia, MCM is about to findout what’s more important: its German heritage or its Korean ownership.
Theaccessories brand celebrated the grand opening of its new10,000-square-foot flagship here Friday night. The store, its second inthe city, will serve as a platform to reach more local consumers as wellas a gateway for it to enter China by gaining more recognition amongthe millions of Chinese tourists who cross the border annually to shopin Hong Kong.
Hundreds of onlookers squished around a barricadeoutside the new store, located in the basement of the EntertainmentBuilding, which is in a posh shopping district in the city. Most came tosee Korean star Rain. Fans carried signs welcoming the model, actor andsinger to Hong Kong. One woman, when asked whether she was familiarwith MCM, replied, “Yeah, it is from Korea.”
“I think Rain willmake it popular,” the fan said, adding that she always sees Rain totingMCM bags.
Founded in the Seventies by Michael Cromer in Munich,MCM became known for its logo-driven accessories, but fell out offashion in the Nineties. In 2005, Sung-joo Kim, one of Korea’s topbusinesswomen and head of Sungjoo Design & Tech, MCM’s licenseholder in the country, acquired the brand and has made it her mission toreinvigorate its image.
Kim, also responsible for licensingother luxury brands in Asia, has poured $100 million into relaunchingMCM, which now stands for Mode Creation Munich. More than 100 storeshave been closed in the United States and Europe. Management has beenrestructured, and Michael Michalsky, the former Adidas global creativedirector, was hired to head up design and to renew the brand’s Germanheritage.
So far, Korea has been MCM’s major success story.MCM’s licensing business in the country was already at around $100million in revenues when Kim acquired the brand. Today around 90 percentof MCM’s $400 million in annual sales come from Asia, the bulk stillgenerated in Korea, where there are more than 85 MCM stores.
NowKim is ready to conquer China. MCM already has retail spaces inShanghai and Beijing. Soon one will open in Tianjin, and there are plansto open 30 additional locations in greater China this year alone. Overthe next five years, Kim says she hopes to have 100 stores in the marketand grow sales to $1 billion annually, up to 90 percent of which shesays she projects will come from Asia.
But whether MCM takes offin China may largely depend on whether Mainland consumers are drawn tothe brand because they perceive it as being German or because theyperceive it as being Korean.
“We are a German brand veryclearly,” Kim said. “Our heritage is from Munich, and we carry a Germanflag and also we have a German creative director, and we still producein Germany and also Italy and Korea. We will continuously be featured asa German brand.”
Yet the influence of Korean culture, oneverything from fashion to music to celebrities, cannot beunderestimated across Asia. From Beijing to Bangkok, young people fawnover Korean boy bands and even undergo cosmetic surgery to try to lookmore Korean.
While Chinese certainly buy luxury brands becauseof their European heritage, MCM’s Korean connection may be one of itsbiggest assets, particularly since, according to Kim, there will be veryfew, if any, new stores opened in the West anymore.
“We are notgoing to really burn a lot of cash out there [in the West], let’s putit that way,” she said. “Our main focus will be Asia and maybe our nextmain focus will be Latin America, Russia and the Middle East.”
Designsalso are becoming more Asia-centric. Accessories with MCM’s signaturelogo will remain a staple for Asian business, particularly in Chinawhere nouveau riche obsessively buy logo-centric luxury products.
Linesunveiled exclusively for the new store include an evening bagcollection featuring clutches with Swarovski Elements as well as a lineof goatskin bags with mink charms.
“I know how reallysophisticated ladies carry themselves, and I want to do the same withthat quality and sophistication. That is our aim, pushing our brand moreand more, higher and higher,” Kim said.
The limited editionRain for MCM Collection was also unveiled. It features messenger bagsand backpacks with Rain’s signature studded onto the croco-embossedleather bags.
“Of course a lot of things are driven through Asiabecause that is where [MCM] is really successful,” said Michalsky, whoalso attended the opening. “But they are also valid for Europe.”
Movingforward, Kim and Michalsky said MCM would focus on functional, funkyluxury for younger, tech-savvy generations who are turned off by moreconventional notions of high-end style.
“As long as we arealways open to new cultures, new things to learn about, I think that iswhere culture is going in the future,” Kim said. “It is very globalized.No East and West. No young and old. That is where MCM wants to stand.”
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