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Raphaël le Masne de Chermont: Plotting an ambitious expansion plan for Shanghai Tang |
INTERNATIONAL. Travel retail is playing a key role in driving sales growth for fast-growing fashion brand Shanghai Tang, according to Executive Chairman Raphaël le Masne de Chermont.
Speaking to The Moodie Report at TFWA World Exhibition in Cannes, he said: “Travel retail as a channel is helping us tremendously. It’s a very strong way for us to build the exposure of the brand to travellers, who after all are our best ambassadors. There has always been a strong link to travel in our brand and our products, and that is reflected in the ambitious goals we have for the channel.”
From 40 points of sale (across all channels) today, the company plans to have 70 by 2014, said le Masne de Chermont. By then, some 30% of turnover will come from travel retail, he pledged.
The brand began life targeting western customers seeing a taste of Asian fashion, but has since developed its appeal to Asian, and especially Mainland Chinese consumers, he added.
“We have seen tremendous growth among the Chinese and on the Mainland, where we now have 15 shops, three each in Beijing and Shanghai. The Chinese customer is becoming more confident today. From an initial base of entirely western customers, our sales are now 50% to western and 50% to Asian customers.”
In travel retail today, the goal is to extend distribution to all of the major Asian hub airports. Its latest opening came in May at Beijing Capital International Airport T3. Airports will also be the focus of expansion outside Asia Pacific.
“Today we are represented with a store operated through Gebr Heinemann at Frankfurt Airport, but we would like to be in other big European capitals too, notably London (Heathrow) and Moscow,” said le Masne de Chermont. “But we want to be selective and we don’t want to be everywhere. We want to take a boutique approach, even if the space is small to begin with. We have a unique brand, and we are also one of the few fashion brands that sells garments in the channel. We believe we have an offer that can help break the monotony of airport retailing.”
Apparel, said le Masne de Chermont, represents around 55% of turnover for the brand in the airports channel. “It’s a high proportion in a business that is traditionally dominated by accessories,” he said. “But accessories are a growing area for us too, at around 35% of the business and rising.”
We also asked the Executive Chairman what he sees as the key challenges and opportunities for the brand today.
He replied: “The biggest challenge is the fast-rising cost of real estate in Asia, and China in particular (on the local market). There is no protection against sudden and dramatic increases in real estate, and therefore your rent, so that eats into your margin. We are constantly assessing whether we are getting the best deals on our leases, and it’s a real challenge.”
He added: “As to the big opportunities, I’d have to say it’s the Mainland Chinese, who are quickly adopting our brand. When they get to know Shanghai Tang they come to love it, and that gives us the confidence to invest in the next phase of growth. And of course, travel retail is playing a big part in putting us on the map.”
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Shanghai Tang wants to extend its presence at key European airports beyond Frankfurt (pictured) |
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