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PARIS — In his cozy, art-stuffed apartment, Gilles Dufour unfurled a small bolt of golden silk, revealing hand-painted butterflies alighting here and there on the gauzy cloth.

This story first appeared in the December 31, 2014 issue of WWD. Subscribe Today.

It’s one of his latest finds from the giant flea markets of Beijing, where he returns once a month as the full-time artistic director of Chinese cashmere giant Erdos Group. The French designer, who quietly took on the role in 2008, just renewed his contract for another three years, as Erdos charts steady growth in Asia and is poised to expand into Europe.

Perhaps best known for his long career at the elbow of Karl Lagerfeld, Dufour went on to helm Balmain ready-to-wear and a signature label before a chance speaking engagement in front of Chinese manufacturers landed him an offer from Erdos that he couldn’t refuse.

“They’re extremely nice people,” he said. “They have huge factories — it’s incredible. They bought all the newest machinery from Germany, from Italy, all the best knitting machines. They are really up to date.”

Among the first Europeans to become a creative director at a big Asian manufacturer, Dufour has seen the Chinese market become more sophisticated and competitive.

He credited his boss, Yiling Zhang, and Yiling’s wife, Wang Zhen, president and owner of its elite 1436 line, for steady growth of 15 to 20 percent a year for Erdos, which generates revenues of about 125 million euros, or $155 million at current exchange.

While the Erdos brand is about 30 years old, Dufour has brought his European sensibility and a trendier approach to what he described as its “old and classic cashmere image.”

While he has referenced modern artists such as Mark Rothko and Josef Albers, Dufour is equally inspired by Chinese culture, cognizant that animals and flowers are among its treasured motifs. He incorporates them into novelty sweaters and also designs sleek, double-faced toppers and handsome leather-trimmed overcoats.

Pointing to one catalogue — featuring Chinese model Liu Wen, the face of the brand — he singled out a preppy pink cardigan with a twist. “I transgress. I’ve taken the cable knit from Ralph Lauren, but I’ve added real jade buttons and the shape of a Chinese worker’s jacket,” he explained.

Interviewed in early December, Dufour was putting the finishing touches on fall and winter 2015 ranges for what he called “buying conventions,” which attract 900 buyers to sessions in January and February.

Erdos sells its branded sweaters to about 2,000 doors, including a new flagship in Tokyo. It also produces knitwear for a number of European brands and is slated to open a showroom in Milan in 2015, Dufour said.

In a wide-ranging interview, the affable designer reflected on his experiences in the vast Chinese market:

WWD: How has the collection evolved since you started?

Gilles Dufour: Most of my collections are based on the softness of cashmere, the luxury of cashmere. But it’s expanding quite fast. We set up a new category of cashmere coats four years ago, and [Erdos has] developed very good production methods. We make very high-quality products both in the manufacture and workmanship, even with non-cashmere items such as silk, cotton and linen. We’re also doing a lot of accessories in cashmere: scarves, hats mixed with fur, fur collars, knitting furs with cashmere — all kinds.

WWD: How interested are Chinese consumers in the designers behind the label?

G.D.: [Erdos is] trying to make it known. They always put my photo in the catalogues, and I have my little labels always attached to the sweaters “Made by Dufour.” And I’m doing a lot of television and Vogue and things like that. [Erdos is] quite interested to know the same questions as you.

WWD: Have you always been partial to sweaters?

G.D.: When I started at Chanel, I did all the knitwear. So, I was designing all these lovely little sweaters — in bright colors with contrast trim, very close to the body, very sexy — so they were a huge success. They told me I was good at cashmere. It’s an easy thing to do because it’s so soft and nice to wear and warm. When I was a teenager and got good grades at school, my father used to take me to Anan, a boutique in Paris, and buy me a cashmere sweater. I thought it was the peak of luxury.

WWD: How has the manufacturing scene and capability changed since you started with Erdos?

G.D.: Erdos was the best cashmere manufacturer long before I started with them. They control the process from the raw material, and they supply many famous brands. They are great technicians. They know all the latest finishes, the latest treatments, washes, and they’re equipped for hand embroideries and finishing. They are wonderful at experimenting, creating incredible things, really.

WWD: How are consumer expectations evolving in China?

G.D.: China is a huge market with a variety of customers. They are becoming more and more educated about fashion and trends. Generally speaking, the mature customer loves designs with more details, print and embroidery, and even Swarovski elements. The young customer loves more simple shapes and designs. The consumer is becoming more comfortable with herself. They are no longer only copying the big foreign brands.

WWD: Does such a big market demand lots of variety in design?

G.D.: We are doing huge collections, like 600 to 800 pieces per collection, for different markets. Also, we are doing men’s collections, which I’m supervising but very lightly. With women’s, I’m completely hands-on. The company believes that design should drive the business. So, they let me do some experiments, some crazy things. Can you imagine we have about 100 colors to play with every season?

WWD: Is your approach different when you are doing a collection for a European or global brand?

G.D.: I’m more careful about what they expect me to do. I have to deliver the right things — they have to sell. That’s the most important thing in China. I’m not doing commercial in a boring way, but things that can be worn and worn for a few years, not only for six months. People are not as rich as they are in Europe, so they don’t understand the need to change fashion every five seconds. So, I’m trying to be very classical and high quality in the way of Loro Piana and also [create] some trendy things in the way of Gilles Dufour.

WWD: How do you tap into trends in China?

G.D.: I look at the street; I look at the magazines; I look at the way people are dressed; I go to the flea markets. I go to the Museum of Contemporary Art in Beijing, [and] I go to the Peking opera, which makes me understand the Chinese people. They have a huge civilization, and they are very sophisticated. Since the Cultural Revolution, they have lost a lot, so they are relearning. I’m very [interested in] Chinese people, by what they like, the colors, the shapes. For example, women will show their legs but are very modest when it comes to the bosom.

They are very touched by poetry. Each time you put some poetry in a sweater or a love story behind it, they appreciate it very much. It has to be poetic — like, for instance, when I do a sunset, a forest in the springtime, things that are a little romantic.

WWD: Have you traveled a lot within China? Can you share some of your impressions, favorite things?

G.D.: I’ve worked in Hong Kong, in Shenzhen, in Shanghai, but mostly I stay in Beijing. Beijing is a good place for working. They have a huge flea market where I go and buy antiques, silk, old fabrics, which can be an inspiration, old embroideries. I go to the Peking opera a lot. Now, even in the provincial cities, you have malls, which are becoming more and more international, with different brands. That’s why Erdos wants to be European-minded. They don’t want to be only Chinese. They are always ready to work really hard, the Chinese. They are never really relaxed about competition and are aggressive about facing it.

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