The group clearly sees strong potential for growth in the city, and is pushing ahead with expansion plans despite the difficult times experienced in the past two years.

Many companies felt the impact of the Sars crisis early last year, and some streamlined their operations because of the drop in consumer demand.

But Escada saw the setback as an opportunity and secured for itself a prominent spot in Tsim Sha Tsui, the tourist and retail hub of Kowloon.

Escada's two-storey flagship store (with street-level entry) is in the new commercial building One Peking, in the heart of Tsim Sha Tsui, next to Canton Road.

'We have created an exclusive VIP lounge to give our customers a comfortable and luxurious environment,' said Escada (Asia) managing director Sandra Leung.

'The lounge includes a spacious environment to try on couture gowns. The customer can enjoy a cup of cappuccino while contemplating jewellery, ready-to-wear and accessories.'

As the economy rebounds and consumers return to stores in droves, boosted by the presence of a steadily growing number of mainland visitors, the retail business looks to be flourishing.

Ms Leung said China was the new emerging market and mainland visitors were a stimulus to Hong Kong's retail environment.

'The Escada collection is already well known in China,' she said. 'We see many mainland customers shopping at our stores.'

Escada is a luxury brand that projects elegance, femininity and colour.

Products range from couture gowns to smart, ready-to-wear apparel, and from jewellery and accessories to fragrances.

Escada was founded in 1976 and grew rapidly. Sales soared from 22 million deutschemarks (HK$108 million) in 1979 to 200 million marks ($982.4 million) in just five years.

Expansion included the setting up of subsidiaries in the United States, Britain, Canada and Japan. Stores, franchise boutiques and corners in department stores promoted the luxury brand's image around the world.

At the start of the new millennium, the group's sales hit 1.5 billion marks. The company estimates that it has half a million regular customers around the world.

The company operates more than 400 stores in 60 countries, and more outlets are due to open in Asia and Eastern Europe.

Escada's expansion into Asia picked up speed in 1997 with the launch of the Laurel brand in Hong Kong. Established in 1980, Laurel is the company's secondary line for the dynamic young businesswoman.

Customer first is the group's abiding philosophy.

'This ensures we give our customers the very best service,' Ms Leung said, adding that the approach had earned the company customer appreciation and loyalty even in hard times.

The group is also making its presence felt in the vast China market. The Escada network covers a number of franchise and wholesale shops in large mainland cities.

The Escada accessories line has enjoyed strong growth, and in 2000 the brand launched its diamond jewellery collection, which has been well received. Escada fragrances and eyewear have also enjoyed much success.