Lane Crawford shifts mainland tack

Lane Crawford Joyce Group, a luxury fashion retailer privately owned by Wheelock & Co's Peter Woo Kwong-ching, will invest HK$300 million to open its first self-operated department store on the mainland, after failing with all its three franchised stores across the border.

The new Lane Crawford, to be opened in Beijing in October, will occupy three floors - totalling 80,000 square feet - of the new luxury Seasons Place mall. It would be followed by other self-operated department stores, including in Shanghai and Macau, said company president Jennifer Woo Chung-yan, daughter of Mr Woo.

She did not provide a timetable.

She said the company had changed it strategy for Lane Crawford in order to gain 'better control' of operations, closing earlier this year the franchised stores in Shanghai, Hangzhou and Harbin. These stores were too small to match the new goal of each outlet being between 80,000 sq ft and 120,000 sq ft. Lane Crawford's Hong Kong flagship store in IFC mall covers 82,000 sq ft.

The group, which distributes products for luxury brands such as Hugo Boss, Stella McCartney and DKNY, already has a strong presence on the mainland with its single-branded stores. It aims to open 50 mainly single-branded stores in the region this year for a total of 500 in Asia, of which 223 will be on the mainland.

The high-end department store's move back into the mainland comes as the country's surging economy is creating better off and brand-conscious people more willing to spend on luxury items. A recent Goldman Sachs report found that the mainland is the world's third-largest consumer of luxury goods, accounting for 12 per cent of global sales, behind Japan's 41 per cent and 17 per cent for the US.

The report predicted that the mainland would become the world's second-largest purchaser of luxury goods by 2015, with 29 per cent of such sales.