Lane Crawford's return to Shanghai signals a China-first strategy

Lane Crawford's return to Shanghai signals a daring China-first strategy for the retailer

PUBLISHED : Friday, 01 November, 2013, 12:58pm
UPDATED : Friday, 01 November, 2013, 12:58pm

For the past few years, China's retail scene has been dominated by glittering malls and monobrand stores devoted to luxury giants, such as Gucci and Prada.

But the landscape is changing as more multi-brand stores sprout up to meet the demands of consumers seeking a different shopping experience.

Wherever we can showcase local talent globally, we will
Andrew Keith

Examples of this include the iconic Italian boutique 10 Corso Como in Shanghai and Galeries Lafayette in Beijing.

The one that got insiders really buzzing, however, was the arrival of Lane Crawford's flagship store in Shanghai.

The official opening this month included a celebrity studded party with 4,000 guests including actresses Maggie Cheung Man yuk and Carina Lau Kar-ling, and supermodel Du Juan. Located on Huaihai Lu, an area that's fast becoming a hotspot for luxury fashion, the store marks a few milestones for the Hong Kong-based retailer.

Measuring a whopping 150,000 sq ft and covering four floors, it's the chain's largest store to date (more than double the size of its flagship branch in IFC Mall).

It's also Lane Crawford's biggest investment at 400 million yuan (HK$506 million), and a homecoming of sorts.

The brand opened its first store on Nanjing Road in Shanghai in 1872 and had a branch in that location until it closed in 2005.

"Shanghai has always been strategically important for us, however, the previous store was 30,000 sq ft, which is very small in Lane Crawford terms. It was also operated by a partner, which meant that the merchandise, services and experiences weren't aligned with Lane Crawford," says company president Andrew Keith.

"We decided to finish the partnership and said if we came into China it would be directly operated. We did it first in Beijing and Shanghai followed.

"In China it's important that you are totally consistent in how your brand is presented."

Visually, the new store fits with the brand's other "new generation" outlets, thanks to its chic, modern gallery format designed by New York-based architects Yabu Pushelberg.

Selling everything from fashion and lifestyle to beauty and homeware, the store stocks more than 500 international brands from established names such as Emilio Pucci and Marc Jacobs, as well as cult favourites such as Azzedine Alaia and Céline.

Interestingly, the strongest performing category so far has been women's ready-to-wear, with Alexander McQueen and Givenchy topping the list.

"Compared to when we fist opened in Beijing in 2007, customers are becoming increasingly sophisticated.

"While the two cities are quite different, overall, you see this awareness of personal style. [Customers] are moving away from buying products to make a materialistic statement. They are choosing items because it gives them a sense of personal identity," says Keith.

"They are also looking for new experiences and access to brands they wouldn't have normally … I don't want to say we are educating people - instead, we are inspiring people through brands we select."

Hence the Shanghai store has many names you won't find in Beijing. There is a floor dedicated to contemporary fashion stocking more forward looking and affordable brands, such as Alice & Olivia and Helmut Lang, and newcomers including J. Crew and British brand Whistles, which is available in China for the first time.

Keith says the contemporary category has huge potential for growth on the mainland.

"As the Chinese become more confident and fashion aware they are really happy to mix and match. Also what's happening in the contemporary realm right now is so innovative … There is an awareness of brands that aren't available here, so why can't we be the ones to bring them in?" he says.

To showcase emerging talent in art, fashion and design, the store has a dedicated space called The Hub. At present, it features the collections of three Chinese designers - Ms Min, Helen Lee and Chictopia - who were hand-picked by fashion director Sarah Rutson.

Surprisingly, it is the first time Lane Crawford has stocked China-based ready-to-wear brands and the response has been encouraging, with an 80 per cent sell through on the first day.

Keith says the mainland has reached a critical point where the value of "created in China" is worth more than an item being "manufactured in China with someone's else label on the back of it".

"China is moving away from being seen as a manufacturing base to a creative and innovative culture, so wherever we have the opportunity to work with local talent and showcase it globally, we will," says Keith.

While the right brand mix is essential; so is customer service. To cater to the more discerning, the store has personal concierges on each floor, as well as a team of 65 personal stylists.

There are also dedicated Platinum Suites, which are decked out like luxurious apartments, for men and women. Keith says the space can also be used for intimate dinners or runway shows.

"Service is critical as there's a finite amount of brands out there. Regardless of how brilliant a job you do with editing or exclusives, it's increasingly about the experience, the service. That's a key differentiation as a retailer."

Another area Keith is focusing on in China is e-commerce. Lane Crawford is developing what he calls a "connected commerce strategy", which seamlessly integrates the in-store and online experience.

"We launched our e-commerce business in Hong Kong and China at the same time and it is growing rapidly. Greater China is 70 per cent of our business online so we are approaching online as an integrated part of our stores,not as a separate business.

"As such, China [for us] is growing at 300 per cent a month, which is extraordinary. We have an integrated approach to shopping so you can make your purchase online and then pick up or return to the store," he says.

While online is critical to Lane Crawford's China strategy, there are still plans to open more stores in key cities. Next on the agenda is the opening of a boutique in Chengdu, a second-tier city which Keith describes as the Silicon Valley of China.

"China is not a short-term strategy, it's intrinsic to our history and we see our growth coming from there.

"Chengdu is an exciting opportunity, but we are also looking in other cities. We are not in the business of opening cookie cutter stores - each one has its own personality, so the right space is important.

"With China you need a lot of patience and a long-term vision, be committed and invest a lot of time and money in being able to deliver that.

"You absolutely cannot underestimate the customer and the level of experience and expectation they have and how quickly they are evolving. You need to be adaptable," he says.

With the business set to grow in China, will Hong Kong take a back seat?

"Hong Kong is the heart of us, but we are a Greater China retailer. So much of our business is connected with China. If you compare the growth in Hong Kong to China it's not even close.

"In Hong Kong, consumers were slower to become confident. In Shanghai, it's all about taking risks and that has led to a whole new creative spirit," says Keith.

"It's more exciting for us as a retailer."