Using its existing network of mall stores, Ohio-based casual wear retailer Abercrombie & Fitch has created a foothold for its brand in the upscale part of the Chinese market.

A showcase shop is scheduled for opening next year following the opening of a multiple-floor store in Hong Kong’s Central Peddler Building this year, the site which formerly housed the Shanghai Tang flagship.

Abercrombie & Fitch focuses on what it describes as “casual luxury” items. It supplements this assortment of products with Abercrombie kids plus lingerie retailer Gilly Hicks and teen apparel-oriented Hollister.

The first Hollister outlet in Hong Kong opened in August last year at Festival Walk in Kowloon Tong. The first store on the mainland opened at Raffles City Mall in Shanghai last November. Another store opened in Shenzhen in January, at the MixC Mall.

In a conference call with analysts, Abercrombie & Fitch chairman and CEO Michael Jeffries described the company’s overall business with Chinese customers as “very modest”. But he added the company sees “growing awareness and familiarity with our brands in China as a major opportunity”.

“We are working towards an Abercrombie & Fitch flagship (on the mainland) opening in 2013,” Jeffries said. “We will open our third mall-based store in China in March, and expect more Hollister openings during 2012.”

Abercrombie & Fitch reported a 20 per cent increase in net sales for 2011, up to US$4.16 billion. Capital spending this year is expected to reach US$400 million. This is the result of store expansion and customer operations.

GB