HONG KONG-The luxury market here might be under pressure at the moment- particularly for jewelers- but that is not stopping Paris-based Ofée from embarking on its expansion strategy in China.
The jeweler, which specializes in minimalist gold and diamond pieces, just opened its first store in Asia. The 600-square-foot freestanding outpost is located on Paterson Street in Causeway Bay on a strip home to several jewelry boutiques including Chow Tai Fook and Pandora. The opening comes just ahead of Chinese New Year, which kicks off early next month.
LBB Asia, the retail consultancy and brand management firm, is bringing the brand to Asia. It plans to open another four to six stores between Hong Kong and first-tier cities in mainland China by 2018 as well as wholesale accounts in both markets. The brand, which currently counts France as its biggest market with 50 sales points and three stores in Paris, is also looking for a distributor in South Korea.
Prices for the line range from 3,900 Hong Kong dollars, or $500, for a bracelet featuring the brand’s signature “O” motif to 23,000 Hong Kong dollars, or $2,951, for a diamond pave pendant.
Luxury goods players are lamenting poor business conditions here due to the economic slowdown in China and mainland Chinese consumers’ increasing tendency to travel to places like Japan or Europe to shop rather than Hong Kong. Despite the drop in overall business, prime retail real estate rentals are still sky high.
Earlier this month, Hong Kong-based Chow Tai Fook said its retail sales for the third quarter ended Dec. 31 fell 11 percent. Sales in mainland China fell 6 percent while those in Hong Kong and Macau plummeted 20 percent.
But Aude Bousser, managing director of LBB Asia, said tough market conditions actually present an opportunity for the brand, which is priced to compete with luxury accessories more than fine jewelry vendors. She declined to give a sales figure for Ofée but said its sales in France grew 35 percent last year despite challenging macroeconomic conditions and the terrorist attacks in Paris just before the Christmas season.
“We believe [the] Ofée price point is perfect for a younger clientele aiming at purchasing jewels for themselves, while buying qualitative products as all our jewels are 18K gold and diamonds. Those clients cannot afford Cartier or Van Cleef but can buy branded handbags [like Celine and Bottega Veneta] and we are in the same price target,” she said.
Bousser added that that the market downturn provides other advantages as well: cheaper rents and operating costs.
“We believe opening in [Hong Kong] now is a great opportunity as the market is down and our negotiation power is much more important than when the market is booming,” she said. “Even if we know that it will take some time to develop brand awareness, entering the market today is less expensive compared to few years ago in terms of PR and advertising, staffing, store rental and so on.”