Gucci owner targets luxury brands to cash in on Chinese consumers

The firm that owns the Gucci and Yves St Laurent fashion labels is targeting more big brands in the luxury market, to cash in on the demand for status symbol fashion items among Chinese consumers with rising incomes and a growing willingness to spend.

PPR, the French luxury and sportswear group headed by the billionaire Francois-Henri Pinault, which owns the sportswear brand Puma as well as Gucci and YSL, bought a large stake last month in Qeelin, the Hong Kong jeweller founded by local designer Dennis Chan and the French entrepreneur Guillaume Brochard in 2004.

Qeelin has seven shops on the mainland, four in Hong Kong and three in Europe. PPR did not disclose its holding in Qeelin or what it paid for it.

Alexis Babeau, managing director of the luxury division at PPR, said the Paris-based conglomerate will focus on "making small and high-growth investments, which should offer synergies and avoid cannibalisation of our existing portfolio".

Babeau said the purchase of Bottega Veneta, an Italian luxury brand known for its leather goods, demonstrated the company's acquisition strategy, as sales in the bag maker surged to €683 million (HK$7.1 billion) in 2011 from €54 million in 2004, a compound annual growth rate of more than 40 per cent.

Growth in the men's segment in China is significantly stronger than in the women's, notably in leather goods and watches as well as clothing, Babeau said.