CHONGQING, China — “We are like Marco Polo,” said Zhao Yizheng, chief executive officer of Redstone Group.
The Chinese businessman, who oversees an expanding high-end fashion group, was sitting at lunch next to a red bubbling hotpot that the city here is known for. The occasion? To fete a new Chongqing boutique for Giada, the Italian label and his group’s biggest brand, and with it, the staging of an outdoor fashion show at the city’s People’s Liberation Monument.
Later that same day, as the models sauntered down the runway wearing Giada, $2.8 billion worth of deals were being signed between Rome and Beijing, making Italy the first G7 country to sign onto China’s Belt and Road Initiative. Italy’s minister for economic development Luigi Di Maio told the press that day that “there is a lot of ‘Made in China’ coming into Italy and too little ‘Made in Italy’ that goes into China.”
Zhao, who has in one form or another been working to bring Italian brands to the country for the past three decades, couldn’t have agreed more.
The entrepreneur now runs Redstone Group — which aside from Giada includes fellow Italian brands Curiel, Gabriele Colangelo, and Yi, a Chinese contemporary label. But he got his start in the luxury industry in the Nineties working as the China agent for brands like Salvatore Ferragamo and Valentino. That led to him discovering Italy and what eventually turned into a great appreciation for the country’s culture and design.
Zhao said that, by now, he’s traveled “every inch of Italy,” although during his early trips there he found himself often confused. It seemed like everybody was calling his name — “Zhao! Zhao!” he said. It only later dawned on him that the people around him were saying “ciao, ciao.”
It was that personal fascination that initially led him to begin Redstone, which follows a business model of acquiring stakes in high-end but small Italian brands, expanding them in China first, and then globally.
The problem — or the opportunity — he surmises, is that while Italian design is strong, “many Italian brands are family brands. They put too much feeling into [being] friends,” Zhao said.
For example, he said, “I love Ferragamo very much…I said [to them]: ‘You helped me to get into the luxury door, so I thank you very much.’ They are a very kindly family but they always choose the wrong person for the ceo, for the manager. But they are all very nice.”
He then added: “Not like Louis Vuitton — they are an international company. I think Louis Vuitton is the most successful in luxury.”
However, he resists comparisons of Redstone to Shandong Ruyi or Fosun, other Chinese companies that have been acquiring Western brands. “We are a joint venture, we do not buy,” he said.
Under his ownership, Giada has grown by 20 percent every year, he said, declining to disclose further financial figures for the brand or group overall. Giada has 60 stores, with 50 more planned in the coming five years.
While that 20 percent rate matches what the wider luxury industry grew in China last year, Zhao remains unfazed by the prediction that luxury consumption is expected to slow in 2019.
“No, I have confidence in China,” he said firmly. “The good will be growing, the not good will disappear.”
He lists Moncler and Brunello Cucinelli as strong performers in China, adding: “Now, Bulgari is going up. Loro Piana is going up, very good. I believe Valentino, this year, will be good.”
He shrugged off the idea that Giada’s growth is all that remarkable, saying that these rates may be spectacular for Italy but are considered slow for China. There are many in the industry that were once his mentees that have made money much faster than him, he said.
“They became a rich man. I’m a poor man,” Zhao said humbly. “They have opened many, many thousands of stores in China because they have a good [opportunity]…They make money like money machines. But we focus on what we like to do. We always keep high quality. We are always looking for the best.”
For instance, Giada’s production will 100 percent always will be made in Italy, he said. It extends down to the kind of people he hires, too. He requires that all retail staff have at least a bachelor’s degree — since he reasons that to sell to a high-end customer, the staff themselves need to understand what luxury is, and what social standing means.
At Redstone Group’s Shenzhen headquarters, he’s filled his staff with young Chinese graduates of elite universities such as MIT, Columbia and Cambridge.
This emphasis on class and education is why he doesn’t want to use celebrities for Giada’s marketing. “We don’t like to pay you to wear our brand…anyway, our customers are on a higher level [than celebrities],” he said.
As the group’s biggest brand, Giada recently made its first foray into the U.S., landing in Boston last month. While Boston is a curious entry to the United States, he said the opportunity happened to come first before New York, as a location at the Crown Building on Fifth Avenue requires a renovation that won’t be ready until 2021.
Looking to other brands within Redstone, the label Gabriele Colangelo could open 200 to 300 shops, Zhao forecasts. It was founded in 2008 by the designer who is behind Giada and has yet to turn a profit. But as a fashion proposition rather than true luxury, Zhao thinks it should have a larger footprint.
The group is planning to make another acquisition in September, but Zhao declined to reveal more than that it is another Italian brand and that it won’t be in men’s wear. But wouldn’t he like to own something that he himself could wear?
“No, men’s wear is a very different market,” Zhao said. “I wear Armani.”