Parisian fashion label Groupe SMCP says its ‘affordable luxury’ positioning is luring growing numbers of Chinese shoppers.
SMCP is 70 per cent owned by private equity group KKR (one of the companies linked to a bid for Tesco’s US$6 billion Korean operations).
In an interview with Bloomberg, SMCP CEO Daniel Lalonde said the company is witnessing “an incredible demand” for its products in Hong Kong, and he suspects the reason is the brand’s ‘affordable luxury’ positioning.
“Chinese consumers love the brands – they like the fit,” he said.
In Greater China – including the mainland – Groupe SMCP’s same store sales rose in the high double digits in 2014, over 2013. The growth rate is showing little sign of slowing in the first months of this year.
Chinese shoppers now account for about 10 per cent of Groupe SMCP’s global sales. An increasing number of Chinese travellers are shopping in the company’s European stores, Lalonde told Bloomberg.
Besides its own label, the retailer sells Claudie Pierlot, Maje and Sandro brands, all targeting “modern and elegant women”.
Groupe SMCP currently has eight stores trading in Hong Kong and plans to open as many as five more this year. It also plans more stores in Macau.
While Hong Kong’s retail sales have fallen by more than two per cent so far this year, largely due to the bottom falling out of the luxury watch and expensive jewellery markets, Lalonde told Bloomberg his stores have not noticed any downturn.
“This is what I read and what I’m told – we haven’t been able to see that at all. We’ve seen very strong sales in all our stores that have been here more than two and a half years.”
The full report, with comment from other luxury retailers and analysts, can be read here.