As its global company celebrates three decades in fashion with parties across the world, Karen Millen Australia has something additional to cheer about: spearheading the brand’s Chinese expansion.
After complex negotiations that reportedly lasted three years, the Australasian branch of the Icelandic women’s fashion retailer is overseeing a move into China with plans to open 50 stores in five years.
Shaf Dewani, Australasian MD of Karen Millen, told Inside Retail Asia that the allure of direct investment – which may result in a local partner down the track – was particularly high for the accessories market.
“We’re seeing a lot of growth in accessories. The collection has become a lot bigger and better in terms of quality… I think it’ll be a very big market for us in China,” says Dewani.
The 21 Australian stores, of which nine are Myer concessions, have seen overall sales growth in the accessories sector from eight per cent to almost 20 per cent in recent years.
China is expected to become the world’s largest luxury goods market by 2020, accounting for 40 per cent of worldwide sales, according to a report by brokerage firm CLSA Asia-Pacific Markets.
Shanghai and Beijing will first receive eight to 10 sites, followed by mainland expansion, adding to Karen Millen’s 300 stores and concessions across the world in more than 40 countries.
The ‘bridge’ retailer – which straddles the line between high street and luxury – first entered Australia in 2004 via a franchise partnership with Aesthetics Group, which Dewani founded.
“I was interested in Karen Millen because it was an asset which was differentiated and accessible. I didn’t feel there was anything at that time in Australia where it was high quality but accessible pricing.”
Aesthetics Group sold the stores to Karen Millen’s global enterprise last year, off the back of double growth every year for the last three years in Australia.
Dewani says the company is not currently focused on local expansion except for A grade quality sites, such as a soon to be launched 150sqm flagship in Sydney’s QVB.
Globally, Karen Millen has been focused on e-commerce, with the launch of a global “digital flagship store” last month. This is currently being rolled out locally, however, it’s not certain if highlights like the runway shopping feature will be implemented here.
Karen Millen expects its Australian customer base to grow to 20 per cent in the next year. Globally, the brand’s transactional website launched in 2007 now ships to 22 countries and has visitors from 216.
Sixty per cent of all Karen Millen’s total revenue, said to be 250 million euros annually, is derived from international sales. Retail experts say the company is being lined up for sale next year, according to a recent report in The Independent.
* This story originally appeared in Inside Retail Australia’s subscriber only digital weekly edition. Find out more about our exclusive weekly here.
