WWD.com/globe-news/specialty-stores/a-retail-concept-for-an-evolving-shanghai-467143/

SHANGHAI — For all the talk of Shanghai’s growing middle class, fairly few retail or entertainment venues are dedicated to catering to their particular tastes and price points.

This story first appeared in the February 6, 2008 issue of WWD.  Subscribe Today.

Lisa Qi, general manager of Shang-High Street Loft, a new complex aiming to fill that gap, said: “Shanghai has undergone 15 years of fast development, and the consumers have all been very busy for these 15 years, so they are looking for a space to take a break. There is a growing tide in China in favor of the traditional concept of a ‘slow life,’ and we create an environment for that.”

“Dress well, shop smart, live beautifully” is the motto for the project, which also calls itself High Street or simply Loft, and Shang Jie in mandarin. The development incorporates an array of small, funky shops and boutique restaurants, with a focus on promoting new, local designers and entrepreneurs. Most of the products are in a medium price range aiming at that demographic of white-collar office workers, middle management and small business owners with monthly incomes ranging from 3,000 to 10,000 yuan, or $416 to $1,380 at current exchange.

“People 25 to 40 in age are our No. 1 target, as well as foreigners as there are a lot living in this area,” said Qi. “The No. 2 target is aged 18 to 25, who are potential consumers. They bring the cool factor, and aren’t purchasing much yet but eventually will.”

Loft opened Dec. 1, World AIDS Day, with “Simply I,” an exhibition of fashion photography by Gilles-Marie Zimmerman, which was first presented last March in Paris. Proceeds from the month-long exhibition and affiliated auction were earmarked for UNICEF’s pediatric AIDS initiative. New outlets will continue to open in the complex throughout the next few months.

Promoting the local fashion design scene ranks high among Loft’s priorities, Qi said. “We have seen the economy grow to a certain level of per capita gross domestic product in Shanghai, and there is now a need for a platform for young, local designers. The brand and mall model dominates now, allowing no space for designers to develop….Therefore we cater to designers without a place in the rest of the market, offering reasonable rental prices to young designers.”

Both in Shanghai and the rest of China, indigenous fashion design remains in a protracted infancy. Although China produces a substantial number of promising designers, with some attracting attention on niche and novelty fronts, none has managed to break into the mainstream.

“Chinese designers are getting good exposure already, but are struggling to become businesses, to figure out how to develop. Starting from now on is the time for some talented designers to reach more consumers, and then a few will become global standouts,” Qi said.

Currently Loft is home to “20 stores by young designers, both ready-to-wear and couture,” said Qi. They include La Vie founder Jenny Ji Cheng; furniture and jewelry designer Jiang Qiong’er, who has designed for Hermès; product designer Lin Jing; conceptual apparel designer Zhang D, and Shirt Flag founder Ji Ji. Another 40 stores are international design boutiques or “multibrand, with buyers who collect and resell, and include as maybe 10 percent of merchandise their own designs,” Qi added. “They have talent and taste and the ability to keep up with the quickness of changing fashion trends.”

Loft is located at 508 Jiashan Lu at Jianguo Xi Lu, in a heavily residential southwestern part of Shanghai’s former French Concession and a few blocks from the Taikang Lu design and art district. The building was originally an old factory belonging to Three Guns, which was long the monopoly holder for China’s innerwear market, and today remains the largest brand with almost 30 percent of the market. Its parent company, Shanghai Textile Group, is the majority shareholder in High Street Loft, controlling about 70 percent. Other shareholders include the Xuhui District and the Jiefang Media Group.

The state-owned Shanghai Textile Group, founded over a century ago and officially established in 1949, is today still China’s largest textile conglomerate. However, it has diversified significantly away from for-export textiles and apparel into the real estate and lifestyle businesses. High Street Loft is just one of the group’s many historic factories and warehouses that it has converted into commercial space, including most famously Shanghai’s M50 complex of galleries and artist studios on Moganshan Lu near Suzhou Creek.

“We have a lot of renovated factory spaces,” explained Loft president Shao Feng, who is also an executive with Shanghai Textile Group. “It is rather like New York’s Fashion Avenue, our boss used to work there, and he brought the idea of taking our old factories and turning them into commercial and cultural spaces. We have about 15 to 20 of these projects.” Among these is the new West Bank, or Xi An, in Xi’an, which opened mid-December. That project, also a collaboration with Jiefang Media Group, focuses on fashion and experimental media, said Shao.

Along with Fashion Avenue, or Seventh Avenue, another New York model for Loft was Manhattan’s Meatpacking District, added Qi. The investors came together and began sketching out the project concept in August 2006, and construction and leasing began in March 2007. According to Qi, the development is fully occupied, with a waiting list that includes Indian and Argentinean design collectives.

The more than 322,000-square-foot compound is 30 percent boutiques, 20 percent restaurants, bars and community leisure venues such as yoga and dance studios, and 50 percent loft-style studios and offices.

Their ambition is to become a general hub for Shanghai’s emerging fashion industry.