David Riddiford, president of Lane Crawford, has overseen tremendous changes in the beauty business at this 156-year-old specialty department store chain. The upscale retailer operates three prestigious department stores in China and four in Hong Kong, including an 80,000-square-foot showcase store in the International Finance Centre there.

“Now there’s only one Harrods in London, there’s only one Galleries Lafayette in Paris and there’s only one Saks Fifth Avenue in New York, but we have these four stores in Hong Kong,” said Riddiford. “And before 2004, all of these stores had the same merchandise offer, so the customers would only need to visit their local store. The latest strategy that we now have is to try and encourage our customers to travel around to our stores.” To that end, each store, which averages between 50,000 square feet and 80,000 square feet, has its own look — or core DNA, as Riddiford dubs it.

Just 10 years ago, the beauty business was an add-on at Lane Crawford. “Now, it’s true to say that I think Lane Crawford is probably the beauty headquarters in Hong Kong,” Riddiford told the summit audience. “In line with the strategy that we have for our total business, each store has its own brand identity and its own brand selection in our beauty business,” he said.

Beauty brings big foot traffic to Lane Crawford. “Our beauty business has grown by over 20 percent per year for the last three years, and this year will grow by more than 25 percent,” he said, making it the biggest area in all of the stores, representing nearly 30 percent of their business. With a market very concerned about skin, Riddiford said it is no surprise that skin care is by far the strongest part of the business. “We carry more than 160 brands, many of which are exclusive to Lane Crawford. The top 10 brands have grown at an even faster rate than the business as a whole,” he said.

Customers are willing to open their pocketbooks at Lane Crawford stores. Riddiford said his company accounts for two of the top 10 doors in the world for the sale of La Mer. “We’re a very small business in a very small part of Southeast Asia, and I think it’s an amazing, amazing achievement,” he said.

This story first appeared in the May 26, 2006 issue of WWD. Subscribe Today.

In the past 18 months, Lane Crawford has launched many brands in the Hong Kong market, such as Benefit, Bliss, Fresh and Lola. “We focus our beauty business on providing specialist services, the idea being that we provide somebody who has an objective view of the brands and can guide the buyers toward which brands they think is relevant for them,” he said.

Riddiford said Lane Crawford is trying to bring back the theater of department store retailing. “The idea of the department store, if you look back at the original concepts of department stores and the way they were created, the department store operators, they were showmen, they were impresarios. And I think it’s very, very important for us that what we’re trying to do is, we’re trying to create a very strong retail environment, an architectural environment with theater and promotional activity, which drives the footfall into your stores in order then for the brands to be able to sing,” he said.

He believes in brands versus private labels, especially for beauty. “Our role is not to try and compete with the brands, and that’s why I personally feel very strongly about not having a private label in department stores. I think people come to department stores because they want to see a great selection of branded merchandise, and our job is to create the theater and create the environment in the stores,” he said. However, Riddiford noted that it is especially challenging in Hong Kong to create retail theater via architecture in mall locations. “We’re inside shopping malls. And therefore, what we are trying to do is, we’re trying to create very, very strong identification inside the malls. So that’s why we are trying to differentiate our businesses and have these very strong environments.” The IFC store is a perfect example. It is a luxurious store with the same marble found in the Louvre. “It’s timeless, it’s tailored and it’s contemporary,” he said.

The markets where Lane Crawford operates are changing drastically, he noted. Retail sales in China, for example, are doubling. Riddiford concluded, “I think we can all get seduced by the numbers in China. And I think most of the people in this room are looking at how we can explore the opportunities in China and maximize our business in China.”