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Björn Borg will be targeting young, affluent consumers in China this fall.

The Swedish brand of underwear, sportswear, footwear and bags plans to open two to four retail outlets in China in 2012, said Arthur Engel, chief executive officer of Stockholm-based Björn Borg. The units, which will open first in Shanghai, will include freestanding Björn Borg boutiques as well as in-store shops at large department stores. The company will roll out an additional eight stores in 2013, he said.

With the exception of Japan, this will be the brand’s first major foray into the Asian market, which Engel described as a “huge opportunity” to expand international growth for the brand, which is sold primarily in Sweden, the Netherlands and the U.S.

Engel said he believes the Björn Borg label will become popular in the Chinese market for a growing middle class that increasingly wants strong, personal brands.

“We know there is a young crowd of consumers in China that has the money to spend on fashion brands, and we know the growth in the Chinese economy will be generated by services and retail,” said Engel. “I don’t think the big fashion club for underwear has been filled in China…There are underwear brands being sold for mature consumers on the fourth floor at department stores, but there’s not a lot of underwear in fashion colors and prints for younger consumers who want fashion. That’s what we specialize in and it will give us a competitive edge.”

In order to set up an operation in China, the company entered into a joint partnership in late 2011 with Björn Borg as the principal owner. Among the Chinese owners is Penny York, who will serve as ceo of the Björn Borg operations in China. She was a senior executive at the Chinese garment manufacturing and brand company Dragon Crowd, for which she built up the German underwear brand Schiesser in China at more than 500 points of sale.

York said she expects the Björn Borg brand will, “fit the Chinese market well, especially considering the colorful and trendy design.”

“With Björn Borg’s unique brand profile and a well-planned and long-term enterprise, we see strong potential for the brand in the country,” said York.

Engel noted that specific styles and sizes will be designed and sold exclusively.

“We will change sizing specs [to smaller sizes] and will offer a lot of under layerings…As example, it can be very cold in parts of China, so we’ll be offering bodywear,” he said.

Regarding how business is conducted in China, Engel said it “can be difficult.”

“It takes time to understand the common objectives. It’s a process; it takes time and it depends on what kind of setup you want. It can be challenging and you need to be firm and humble with your values and the culture of the environment you will work in,” said Engel, noting that the joint venture took a year and a half to come to fruition.

Engel added that an e-commerce, social media and a viral campaign are part of the move into China.
“Imagery will be very important for this customer,” he said.

The Björn Borg trademark is owned by Stockholm-based The Group. Björn Borg products are carried in 20 markets and have annual retail sales of around 1.7 billion Swedish krona, or $253 million.

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