BACK in 1983, Lane Crawford had a robbery. It took place at lunchtime when the Central shop was crowded with affluent shoppers. The robbers knew the calibre of the place they were about to relieve of $11 million worth of jewellery so they went to some trouble to ensure that they blended in very nicely. After the heist, the store's general manager, Frederick Doe, complimented them on their appearance. 'They were three very well-dressed Chinese gentlemen,' he said. 'The sort one would expect to find in this department.' Well, you know you're dealing with class when even the thieves dress acccordingly. So discreet had the unfortunate proceedings been that most of the staff and shoppers were unaware that a crime was taking place. The incident was thought to be the first robbery in Lane Crawford's history. Perhaps the three gentlemen were stimulated by the store's advertising campaign of the time, 'We are temptation'. These days, however, Lane Crawford is losing millions of dollars without the help of tailored villains. Last month, it announced that its profits for the six months from March to September had fallen by 49 per cent. The word 'disastrous' could be used of such statistics, except that word had been extensively applied to the previous set of figures, unveiled in July. Those figures showed a drop in profits of 84 per cent for the preceding year. The company took pains to point out that the retail market in Hong Kong has been sluggish, which is certainly true. It also blamed the, yes, disastrous venture in Singapore, of which more later. Suffice it to say that floor space in the Orchard Road store has been reduced from 18,600 square metres to 4,000 square metres, a cut of eye-watering proportions. There is a feeling in business circles that management and, certainly, staff have lost confidence and are not altogether sure what the next step should be. And so now the temptation which exists is to ask, has Lane Crawford lost its way? LITTLE did they realise it back in 1850 but when Thomas Ash Lane and Ninian Crawford got together to set up their shop, they were also creating a mini-metaphor. Like Hong Kong itself, their antecedents did not suggest a capacity for commercial acumen. The island had become British territory in 1841 and the then Foreign Secretary, Lord Palmerston, wrote crossly to poor Captain Charles Elliot (who was generally considered an idiot for having demanded this barren rock from the Chinese): 'It seems obvious that Hong Kong will not be a mart of trade.' A book published in the 1850s on China had a chapter entitled Hong Kong: Its Position, Prospects, Character And Utter Worthlessness From Every Point Of View For England. So, in 1850, when Lane, who had been a humble government clerk, an auctioneer and later a sea-farer, opened a ships' chandler in Queen's Road with Crawford, who had been a store clerk, the pair were showing commendable optimism. These were not monied men - one of the Lane family had been a butler for the East India Company at Canton - but they knew how to seize opportunities and they typified the energy and thrust of the time. Perhaps it was something in the water which, as it happened, the company later supplied to the ships in the harbour. It was not at first a glamorous business: biscuits were a mainstay. When, in 1857, there was a cack-handed attempt to poison the European community by lacing its bread with arsenic, the supply of non-contaminated dough was entrusted to Lane Crawford, which had built up a reputation for reliability.And which was, of course, British. That was a vital factor in its success. As the company expanded and moved upmarket, staff were hired in England and shipped out to give appropriate tone to the establishment. The floorwalkers had their own company mess. In sepia photographs, they were 'moustachioed figures like characters from H.G. Wells', as Jan Morris writes in Hong Kong: Epilogue To An Empire. Kipling would have recognised them, too. They were the pale, glistening faces of the commercial Empire in the East. By the end of the 19th century, Lane Crawford had already become the only place to shop, if you were an expatriate. Like the colony, it was constantly expanding. In 1905, the company moved into a new, six-storey building in Ice House Street, with a selling area of 1,800 square metres and officially became that quintessential, 20th-century artefact, the department store. It was said that you could buy anything from a pin to an anchor within its portals; pianos, billiard cues, 'fascinating creations for evening wear from London and Paris'; even lawnmowers were available. In 1922, the year of the seamen's strike, Lane Crawford went public. Despite such an inauspicious moment, it proved itself to be excellent at surviving both that upheaval and the General Strike which followed four years later. Like the colony, it was resilient, but not unbeatable. It was the Japanese who proved that no rock is impregnable. When Hong Kong fell, in 1941, British commerce naturally collapsed with it. Lane Crawford became a Japanese store and its former managing director, Andrew Brown, was interned. Four years later, Brown returned to the shop premises and found a gutted ruin, a shell with its pearl scooped out. With only $1,000, he set about reinvigorating the business. When he re-opened the store, it was with a product range that included cosmetics, food, metals, coal, chemicals and raw cotton imported from Uganda. They might not have been fascinating creations but people recovering from occupation needed such goods. Within five years, by which time the company was celebrating its centenary, business had perked up so much that Lane Crawford was once more regarded as the quintessential Hong Kong institution. By the late 1970s, Lane Crawford had moved into the Queen's Road location it still retains and had opened a 5,100-square-metre store in Causeway Bay. Robert Huthart, the managing director, was presented with a golden key to the old Lane Crawford shop when it was closed. Huthart was publicly bullish about the future, despite the fact that the small problem of the 99-year lease on the New Territories, which was due to expire in 1997, was becoming a big issue. In 1984, the Sino-British agreement was signed and, in 1985, with impeccable Sino-British symmetry, the British company of Lane Crawford was acquired by Wharf, under the chairmanship of Sir Y. K. Pao. A year later, it became a subsidiary of Wheelock and Company, the group's first foray into the retail business. Things become more confused at this point, politically and commercially. Like the colony (by now more correctly termed a territory), Lane Crawford seems to have been unsure how to handle China and its Southeast Asian neighbours. Two press cuttings from the same year, 1985, convey the sense of impending muddle. In one, Huthart denies that Lane Crawford is about to expand into China and says that there is a need for a mid-range chain of stores because the top end of the market has become saturated. In the other, Frederick Doe (the man who liked the cut of the robbers' suits) announces that Lane Crawford will be opening three department stores in China. Doe also remarks that he had looked at Singapore but as it already had too many department stores and too few customers, it was best to leave that market alone. These, it later transpired, were prescient words. There were also changes in management, in itself hardly surprising given that the former ships' chandler now had a new captain at the helm. Huthart's employment was terminated at the end of 1985, after 20 years' service, and he sued the company for damages for 'alleged breach of warranty and duty of care'. There were rumours of expatriates being encouraged to leave; it was felt that top-level renumeration levels were unduly generous. Lower-level personnel have continued to shoot in and out of the company with unbecoming speed. Group advertising and marketing manager Mason Chan was fired in 1993; her successor, Neil Fedun, who had the sort of memorable moustache which would have put the sepia shop assistants to shame, has also since gone. So has Frederick Doe, who retired last year. At least 15 people have left this year and morale is said to be low. A variety of individuals have handled public relations including an outside consultant called Mabel Leung who sent out a press release in September jauntily bracketing nuclear testing with the store's French promotion ('Well, what can you say but Vive la France!'). No one approached, incidentally, wanted to speak about their experiences at Lane Crawford for this article. Maybe the store casts a long shadow. Strategy seems to be plotted along erratic lines; by the early 1990s, Lane Crawford was already planning its move into Singapore, although the population had not significantly increased and there were still more than enough department stores. To be fair, the Singapore government did not help matters early in 1994 by introducing measures to create shopping districts which were specifically intended to lure shoppers away from the central area. Lane Crawford, sallying into this arena in May 1994, could only expect to be mauled. And was. Last July, John Hung, Wheelock's managing director admitted that the company had got its merchandising wrong. The Singapore store is not expected to make a profit for at least three years, which some analysts think an optimistic prediction. Another fact worth noting is that analysts, on the whole, do not seem to be terribly interested in Lane Crawford. 'It's not very exciting,' remarks one.'Obviously the operation isn't going very well, and there's not much investor enthusiasm.' Meanwhile, Lane Crawford is looking towards China, where the rewards could be terrific but where the risks, for a company with already singed fingers, are pretty high. (Joyce, for instance, which targets the same affluent consumer, is reluctant to penetrate what it views as a difficult market. That company's 1994/95 report says: 'We continue to push back our target date for making a major investment in China. Prospects for foreign upmarket and even middle market retailers remain doubtful. Luxury goods and upscale fashion operators have sustained substantial losses on the mainland and are overhauling their China strategies ...' Only a clairvoyant, frankly, could tell which is the right approach at this stage.) The German fashion labels Escada and Boss, which are represented by Lane Crawford, currently have outlets in Beijing, Shanghai and Guangzhou. It's thought that it will take a couple of years before these, too, show a 'reasonable' profit. 'China is a new market for us,' says Gary Shing, head of corporate affairs at Wheelock. 'Commonsense dictates that we test that market first. It's a learning stage, which means that you pay for your tuition ... We are strong in Hong Kong, we have critical mass here which has been established for a long, long time. But it's not going to be exciting - it's a sideways movement from this level.' So it looks as though the company is effectively perched in a waiting room, loitering for profit in a couple of countries, marking time while the Hong Kong economy proceeds inexorably southwards. ('It's atrocious,' says Rodney Miles, chairman of the Retail Management Association, of the general situation. 'All department stores are suffering. And just wait for the end of year figures.') Even Lane Crawford Express, which was launched in a 3,720-square-metre Times Square site in 1994 as a way of attracting younger customers, has not proved successful. 'We simply don't have the right merchandise,' said chairman John Lees, honestly, last April. 'And the store itself is too big for our target market.' Can Lane Crawford recover? Balbina Wong-Brillhart thinks so, naturally. Her title is executive director (commercial) and she and executive director Peter Pao now lead the company, although, according to one analyst, 'Lane Crawford is Balbina's puppy, it's for her to play with.' Part of her brief is to revamp the four Hong Kong stores, in particular Ocean Terminal which is being increased by 2,600 square metres (Manson House, Lane Crawford's other presence in Kowloon, was closed earlier this year). Words such as revamp, renovate, restructure and re-engineer are very much part of current Lane Crawford-speak. Wong joined Lane Crawford as a beauty consultant in the 1960s when it was still a British company. 'It was so prestigious that a lot of people did not want to go in, they were scared. It was very uppity ... oh yes, we have come a long way.' The store, she stresses, is now European, not British, very much favoured by locals and at the forefront of fashion. 'We are the one,' she says in a low, earnest voice (she can, at times, look and sound disconcertingly like Margaret Thatcher). But perhaps the real trouble with Lane Crawford is that it has only recently had to come to terms with the fact that it is not The One. For many years, rather like the British Empire from which it sprang, it ruled unchallenged. Then one day, not so very long ago, it realised that it was trading on memories. It comfortably rode out the last bad retail blip in the early 1970s because there was no one around to challenge it. Now there is some excellent competition and everyone's feeling nervous. This ride will be harder. John Hung sent a fax to this magazine in reply to some of these issues. Since the departure of the previous president, Frederick Doe, he wrote, 'A wholesale exercise has been taken to change the marketing and merchandising pattern of the Lane Crawford Group ... Quite naturally, this move has brought with it cultural change to the management which is now unitised [sic] by customer groups with a much more open and team-led approach ... The space surrendered by the Singapore store to Marco Polo Developments [Wheelock's sister company] has been turned from retail to lettable office space which is already more than 80 per cent let at market rates. This swift action was applauded by local industry observers ... Whilst we see the trading environment continuing to be difficult for a while, management is enthusiastic that the position will be normalised in one or two years.' The fax ended with the words 'Happy shopping'. This must be the mantra of the moment at Lane Crawford: another fax, from Bosco Liu, the group chairman's personal assistant, ended with the same consumer blessing. And what of Peter Woo, currently chairman of Wheelock and the man who wanted to see what it was like to have a department store? Although it is said that he takes a close interest in what is happening at Lane Crawford, at least one analyst thinks that, if anything, he is moving away from Wheelock: 'He's got more involved in civic duties, public things like housing and environmental concerns.' As of 1996, he is standing down as Wheelock chairman and will take the title of honorary chairman. There is even a rumour that he may be considered a candidate for Chief Executive after 1997. If he is appointed, there will surely be something fitting in the fact that the man who will oversee Hong Kong's return to China brings with him the colonial legacy of two long-dead British entrepreneurs.