Earlier this week WWD reported that Hong Kong entrepeneur Peter Woo, who owns department store Lane Crawford and Joyce boutique, bought an 8 per cent stake in luxury brand Ferragamo. According to an announcement made by the fashion house, the move represents, “significant developments involving (Ferragamo’s) long-standing relationships with the Chinese world.”
Woo is just one of a growing group of Hong Kong businessmen who are investing in luxury fashion including Jimmy Chan (Rue du Mail), Silas Chou (Michael Kors and Tommy Hilfiger), the Fang brothers (Pringle of Scotland), S.K Chan (Aquascutum and Guy Laroche) and the Fung brothers of the Li & Fung group (Kent & Curwen).
With China forecasted to become the largest consumers of luxury goods by 2020 (source: CSLA) it only makes sense that the Chinese would eventually transition from being manufacturers to brand owners. But one does wonder what the implications will be in the long run.
As China is a relatively new and nascent market, their motivations behind buying are quite different to their counterparts in more mature markets like Europe and America. While personal style is a major influence in Europe, a brand’s authenticity, history and heritage are of prime importance to mainlanders. What would happen if they knew that the so-called “European” brand they were purchasing from was actually owned and operated by Chinese? Would they still be so eager to buy it?
A case in point is the recently launched Shang Xia, Hermes’ first Chinese lifestyle brand. Insiders say that the brand is not doing well purely because its being marketed as a homegrown brand, rather than a brand owned by Hermes. What are your thoughts?