The French fashion brand has inked a distribution deal with JamilCo Group, a leading Russian luxury brand distributor, as part of an ambitious international growth strategy designed to more than double its revenues by 2016.
Under the terms of the partnership, Paule Ka, known for its retro-flavored Parisian chic, plans to open six freestanding boutiques in Russia during the next four years and enter 20 leading multibrand stores in cities including Moscow, St. Petersburg and Ekaterinburg. At present, it is carried by Moscow department store Tsum.
Serge Cajfinger, chief executive officer and founder of Paule Ka, said the brand has expanded steadily on the international stage since it was founded 25 years ago.
“Today, we are very pleased to announce this major strategic agreement with Russia, a key market for the group. JamilCo appears as the ideal partner to help us increase our presence and visibility in this country by offering Russian clients a direct access to our collections,” he said.
Paule Ka, whose fans include the Duchess of Cambridge, Jennifer Lopez and Kristin Davis, operates in 51 countries and is available in 475 points of sale, including 57 freestanding stores, of which 13 are directly operated.
It plans to have 100 stores worldwide by 2016, of which roughly a quarter will be directly operated, said Antoine Bing, deputy managing director.
The brand posted revenues of 45 million euros, or $57.9 million, in 2012, up 11.5 percent versus the previous year. It is projecting sales of 100 million euros, or $132 million at current exchange, by 2016.
“Our aim today is to double sales between 2012 and 2016. It’s very ambitious, but we posted 40 percent growth between 2009 and 2012, which were crisis years, so it’s perfectly credible — especially since part of this planned development is based on contracts we have already signed in Russia and China,” Bing said.
Though France remains a key market, accounting for 48 percent of the brand’s sales, Bing expects overseas markets to increase their share of the pie to roughly 70 percent within the next four years.
Paule Ka last year signed two distribution agreements in China, which plan for the opening of 34 stores over five years, including two in Shanghai in 2012. It opened a U.S. subsidiary last October and plans to unveil a showroom on Madison Avenue in New York in April. Distribution deals are also under way in South Korea and Taiwan.
Even Europe, where consumer spending is weighed down by ongoing government austerity measures, is delivering growth, according to Bing, who said that eight of the company’s 13 directly operated stores posted record sales last year. “The European market is suffering, but that doesn’t mean Paule Ka is,” he said.
Paule Ka also plans to extend e-commerce from France to other euro zone countries and the U.K. in spring. During Paris Couture Week, it will stage its first outdoor advertising campaign, featuring its spring-summer campaign with Hilary Rhoda and photographed by Venetia Scott.
Though Paule Ka is absent so far from India and Brazil, it expects Russia and China to generate steady growth as customer tastes mature. Women there have grown out of the first phase of luxury development, when logo-laden apparel was used to show off their newfound wealth, Bing noted.
“Since then, they have been caught up by a wealthy middle class with access to the same goods, so logos have become less of a differentiating factor. Now what they are looking for is a more educated, restrained, discreet luxury — and Paule Ka perfectly meets that demand,” Bing said.
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