Topshop is building a platform for expansion into the Chinese market with help from one of the region’s luxury titans: Lane Crawford.

This story first appeared in the December 14, 2012 issue of WWD. Subscribe Today.

Topshop and Lane Crawford’s new retail subsidiary, Lab Concept, have inked a partnership to open the fast-fashion giant’s first stand-alone store in Hong Kong in May.

The new store will have street frontage and cover an area of more than 12,000 square feet over two floors. It will be located at a corner site within Asia Standard Tower, Queens Road Central, a neighborhood rich with international fashion brands.

“We want to get into that region, and it’s a great start for us, a landing point with big visibility,” Topshop’s owner Sir Philip Green said shortly after the deal was unveiled Thursday.

The tie-up, which comes on the heels of Green’s sale of a 25 percent stake in Topshop and Topman to the U.S.-based Leonard Green & Partners, should come as no surprise: The Topshop tycoon has made no secret about wanting to gain a foothold in China, while Lane Crawford has been actively seeking to raise its profile in the West, and diversify its product assortment.

Earlier this year Lane Crawford teamed up with J.Crew to sell the American brand in China and introduce it to Asian consumers in a sign the department store was broadening its merchandise mix into more accessible price points.

Green specified that the store would be Topshop only, and not Topman — he said there’s not enough space for both — and that he chose Lane Crawford for a number of reasons. “They really understand this end of the market,” said Green. “[Lab Concept] team’s expertise is invaluable to us.”

The two partners worked together before. The Hong Kong-based luxury player carried pieces from the Kate Moss for Topshop collection, and has stocked some of Topshop’s mainline collections for the past five or six years. “They know us, and we know them,” Green said.

He specified that the Lane Crawford deal would not mimic the one Topshop has with Nordstrom, where it simultaneously opened shops at multiple Nordstrom locations in September.

Andrew Keith, president of Lane Crawford, told WWD that other Topshop stores in Hong Kong and Mainland China could follow.

“We’re starting with this very important store in what is Hong Kong’s premier retail destination or address, and we’re hoping that we’ll be able to then extend that into other positions in Hong Kong, and then potentially China in the future,” he said.

The new Topshop store will be managed by Lab Concept, while Topshop will take care of the shop fit and styling.

Keith said Lane Crawford’s past experience with the Topshop brand was proof that Hong Kong shoppers have “an appetite for Topshop’s well-designed products, designer collaborations and accessible price points.”

He added: “[That experience] warranted the fact that [Topshop] needed to be done in a much bigger way. Over those years, we’ve seen how the market has grown and how Topshop’s business has grown. We felt that the timing was right and the opportunity was there to be able to take that partnership to the next level.”

Regarding the Hong Kong fashion consumer, Keith said, “I think that what we’re seeing is an exciting time in the market here, where customers are really looking at what these brands are being able to offer them in terms of great product, great quality, great design at an accessible price.”

He added that the market was becoming increasingly sophisticated. “They shop designer, but they’re also quite happy to find those key pieces and to be able to mix and match,” he said.

Lane Crawford opened its first Lab Concept retail complex in April. It features a mix of fashion, food and beauty merchandise on Queensway Plaza in Hong Kong.

Green has been rapidly expanding the Topshop franchise internationally. He said the 13,000-square-foot Topshop/Topman store in Melbourne, Australia, which has been open for nearly a year, is on course for 15 million pounds, or $23.9 million, in annual sales.

A newly opened store in Sydney is generating sales densities of 2,170 pounds, or $3,450, a square foot. Green’s Arcadia Group Ltd. opened a Topshop-Topman unit in Johannesburg in November — the first in South Africa — while the second one is set to open in Durban at Christmas.


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