LONDON — Wendy Yu is fixing her place in luxury fashion’s firmament, taking a stake in the London label Mary Katrantzou and forming the Hong Kong-based Yu Holdings, which gathers her multiple businesses and investments under one roof.
Yu declined to detail the size of the stake or the terms of the deal, but said she was ready to push the Mary Katrantzou brand in China, where she sees big potential for growth. “I believe that we can go huge,” said Yu in a telephone interview from Shanghai. “I believe in Mary’s vision and her potential not just in fashion but also in the lifestyle sector. I think Mary could be a global lifestyle brand in the next 10 to 20 years.”
Yu Capital, the investment division that took the stake in Katrantzou’s brand late last year, has earmarked up to $20 million to invest in emerging businesses in 2018. Her other fashion-related investments include Bottletop, the sustainable fashion brand, and Fashion Concierge (formerly known as ASAP 54), a fashion-sourcing app with integrated image recognition functionality.
Yu added that she has no intention of being involved in the day-to-day operations at Katrantzou, but will support the designer, who is marking a decade in business this year, by “adding value where I can, helping her to make important introductions in China, navigating through the Chinese market and working on projects in e-commerce and with clients.”
Yu is the latest London fashion investor with their eyes locked on China. On Friday, Centricus, the global investment platform, took a 20 percent stake in Chalayan with the aim of growing the brand in the Chinese market in particular. Last year, the investor Adrian Cheng introduced a new fund called C Ventures, which is focused on bringing together Chinese investors and Western digital brands in fashion and retail. He’s so far taken stakes in Moda Operandi, Armarium, Not Just a Label, Bandier and Finery through C Ventures and other investment vehicles.
The investors’ timing could not be better. According to a report released by Bain & Co. last week, the Chinese consumer is lapping up luxury at warp speed — and they’re doing it at home, rather than abroad.
Bain said that in 2017, the Chinese domestic market grew 20 percent year-over-year, with luxury consumption demonstrating “spectacular growth overall, after four years of lukewarm performance and decline.” The country ate up 142 billion renminbi in luxury goods — $22.07 billion — in 2017, up from 117 billion renminbi the year before.
Much of that growth is coming from online, with e-commerce giants such as JD.com sealing deals with some of the Kering brands for its high-end Toplife arm, and Alibaba unveiling Luxury Pavilion, a section within Tmall that’s aimed at super-wealthy online shoppers.
“Before, we were used to consuming luxury goods in-store in China — online wasn’t as advanced as it is in the West. Now, there is definitely growing trend of consuming luxury goods via e-commerce,” said Yu, who’s already begun to pull in different e-commerce partners for Katrantzou. “I think, at some point, there will be a need for a flagship store in China, but I do feel that e-commerce will build awareness in the digital market, in digital media and social media, which is very key for my generation. Mary has to be constantly communicating to young Millennials through social media and e-commerce because that’s how we shop and communicate and get to know the world.”
The 27-year-old Yu said she wants to be the bridge for Western brands looking to plant their flags in China — and she certainly knows her markets. She was born in China, but was educated at an English boarding school, has a degree in fashion management from the London College of Fashion, and completed executive programs at Cambridge, Oxford and Columbia University.
Her mother is a private investor and her father is a self-made industrialist, the founder and owner of Mengtian Group, Asia’s biggest manufacturer of wooden doors. Yu, a mathematics whiz, is Mengtian Group’s vice-chair. She also loves her art and fashion and serves as a member of the British Fashion Council Trust, which supports and advises emerging brands, and is part of the Young Patrons’ Circle at the Victoria & Albert Museum.
Katrantzou said she took a while before committing to Yu, and is happy with her decision. “I met Wendy over a year ago, and we became friends first before discussing an investment. At the time, we were raising our first-ever round of friends and family investment and she was interested in being part of our growth and supporting the brand in China,” said Katrantzou.
“In considering future growth, I wanted to surround myself with visionary and entrepreneurial women who not only inspire me to design, but who I trust and respect for their business acumen. Wendy has a pragmatic and forward-looking vision, and she’s close friend as well as an ambassador for the brand.”
Having a brand ambassador — in addition to a powerful person who can schmooze the Chinese market from a business perspective — is also key to growth. According to a report published last week by Luca Solca at Exane BNP Paribas, “Chinese key opinion leaders are vital for Western luxury goods brands seeking to break through in digital luxury in China.”
In terms of future investments, Yu said she’s looking, in particular, at businesses which already have a great track record and are ready to move to the next stage. “I’m open to all sectors, especially technology, fashion and lifestyle.”
She’ll also be attending the Paris couture shows, which run from Jan. 21-25, and said she’ll be hunting for new business opportunities.
“I think a lot of couture houses are trying to evolve and they are really excited about the Chinese market as well. I’m friends with a lot of designers, and a supporter of couture – I think it is really the highest form of art in fashion design. I think at some point, there could be synergies (with some couture houses) or maybe we can grow their businesses or introduce more people to them. Couture should be more than Dior, Valentino and Chanel – there are so many talented designers out there,” she said.
Looking ahead, Yu added that she has an “exciting project in the U.S. in March, but on the investment side,” although she declined to provide further details.
The Katrantzou investment is just one of the balls that Yu is juggling. Other investments include Tujia.com, a Chinese online marketplace and hospitality service that enables people to lease or rent short-term lodging, and Didi Chuxing, the largest taxi-hailing firm in China that bought out Uber’s Chinese operations in August 2016.
Yu Holdings has other divisions in addition to Yu Capital: Yu Fashion’s aim is to champion and nurture designers’ creativity via special projects that promote ties between China and the rest of the world, while Yu Culture is working on international partnerships, according to the company. In fiscal 2018-19, Yu Culture plans to unveil a major partnership with BAFTA, the British Academy of Film and Television Arts that will see collaboration opportunities for British and Asian nationals.
Yu said that all of the holding’s divisions have “the end-goal of bridging the economic and cultural gap between China and the rest of the world, a mission that drives every decision Yu Holdings makes.”
As if she didn’t have enough to do, Yu is also mulling opening a consultancy down the road. “My team and I have been asked for advice and input on projects, and we’re making a lot of great introductions — which I’m happy to do — but I think at some point we’ll grow that into a business,” she added.
She said she has a passion for making things happen: “I not only see myself as an investor, but as an entrepreneur, adding creative values to special projects, offering advice and making introductions. I love the idea of traveling and constantly meeting with new people, finding new ideas and constantly learning and absorbing.”