Premium casual wear retailer Abercrombie & Fitch plans to open its first flagship store on the mainland next year after establishing a network of smaller shops inside upscale malls to build up brand awareness.
The Ohio-based company also confirmed the much-anticipated opening this summer of its multiple-floor, showcase store in Hong Kong in Central's Pedder Building, where the Compagnie Financiere Richemont-owned Shanghai Tang's main shop used to be located.
'Our overall business with Chinese customers is very modest today,' Abercrombie & Fitch chairman and chief executive Michael Jeffries said yesterday in a conference call with analysts.
Jeffries, however, pointed out that the US firm sees 'growing awareness and familiarity with our brands in China as a major opportunity'.
Abercrombie & Fitch, which reported a 20 per cent year-on-year increase in net sales to US$4.16 billion for the financial year to January, estimated its capital spending this year to reach US$400 million, mainly related to new stores and investments in distribution and direct-to-consumer operations.
Apart from what the company describes as its main 'casual luxury' brand, Abercrombie & Fitch, its other brands include teen apparel-focused Hollister, children's wear retailer abercrombie kids and women's lingerie specialist Gilly Hicks.
The company opened its first Hollister store in Hong Kong in August last year at Festival Walk in Kowloon Tong.
Its initial Hollister store on the mainland was launched in November at the Raffles City mall in Shanghai and a second shop was opened at the MixC mall in Shenzhen last month.
'We are working towards an Abercrombie & Fitch flagship [on the mainland] opening in 2013,' Jeffries said. 'We will open our third mall-based store in China in March, and expect more Hollister openings during 2012.'
According to property agents, Abercrombie & Fitch has leased a number of floors for its Hong Kong flagship in Pedder Building for a monthly rental of HK$7.5 million.