US fashion designer Michael Kors is about to expand into Chinese retail markets.
Michael Kors Holdings chairman John Idol said the next 10 months will see an opening of stores in Hong Kong, Macau, Taiwan and the mainland.
“We intend to open 15 stores in Greater China this year. Over the next three to five years, we will have 100 stores open in this market,” Idol said.
“We think we’re perfectly positioned to be one of the largest luxury-goods companies in China.”
New York-listed Michael Kors has expanded its global assets consisting of stores and concessions from 156 to 231 during the year to December 31. Up to 75 per cent of its US$95–105 million capital spending allocated for the fiscal year to March 31 is for opening new locations.
Fiscal third-quarter (ending December 31) net income growth, on an annual basis, was US$39 – up from US$28 the previous year. Revenue climbed to US$373.6 million from US$222.5 million.
Entry into China by Michael Kors is matched by other international retailers of upmarket apparel and accessories such as Coach, which announced in December it would open about 100 stores in mainland China.
The emphasis on mainland China was reflected in the choice of showcase stores. The flagship store on the mainland “will rival our store in Paris, which is our largest globally with more than 7000 sq ft of retail space,” said Idol.
In China, according to Idol, there will be stores in metropolitan centres such as Beijing and Shanghai, and in smaller cities such as Chengdu, Shenyang and Nanjing.
Sands and the City of Dreams hotel-casino complexes in Macau will each have a Michael Kors store opening in April. Michael Kors plans to open a Hong Kong flagship in addition to the store now operating in the shopping arcade of the Peninsula Hotel in Tsim Sha Tsui.
A report issued this month by CLSA Asia-Pacific Markets confirms the upward trend in the area of luxury goods and that China will reach the top position in the world in terms of these sales during the next decade, at an estimated 0.6 per cent of the gross domestic product. This amounts to 74 billion euros or 753 billion Hong Kong dollars.
The Greater China market, according to the CLSA Asia-Pacific Markets report, now accounts for 28 per cent of sales for Swiss watch group Swatch, 22 per cent of Swiss luxury goods house Richemont, 18 per cent of Italian jeweller Bulgari and 11 per cent of French fashion retailer Hermes.
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