SAR suits Armani's overseas ambitions

Reports of the demise of the Hong Kong consumer may be grossly premature - at least the Giorgio Armani Group hopes so.

The luxury fashion company will open a Giorgio Armani mega-store, its second, in Hong Kong late next year. The first such store is in Milan, Italy.

The mega-store - so-called as its design is is on a significantly larger scale than most fashion boutiques - will dominate the ground and first floors of the Hongkong Land redevelopment of Swire House at 11 Chater Road in Central.

'We are aiming to create a world of Armani. Our customers will be able buy not only our products but also be able to relax and be entertained,' said Jakob Meier, president of Giorgio Armani Asia-Pacific.

Central to the new store's theme will be life according to Mr Armani.

This means that, not only will customers be able to buy clothes so as to dress in the Italian fashion guru's image, they will also be able to sample his taste in food, in the attached restaurant, and buy presumably Armani-approved designer floral arrangements in the integrated flower shop.

The company hopes the new store will reinstate Armani's lead for fickle consumers. In recent years, the designer has lost some ground to competitors with more youthful and daring images, such as Jill Sander and Paul Stuart.

'We are introducing new concepts to attract new consumers,' Mr Meier said.

There are worries.

The rise in popularity of casual wear over the past decade - whether as office or evening gear - has dented demand for the more formal gear Armani sells.

And the local retail sector is going through severe difficulties at the present - crashing global economy, high rents, deflation and stalled discretionary spending on luxury items among consumers have all taken a toll.

But they do not seem to daunt the Italian fashion house.

'We have a long-term view of the markets that we operate in. Every market has a need for elegant clothes to wear,' Mr Meier said.

He considers economic woes are cyclical.

'Everyone in their own life has gone through ups and downs before. It is a question of how we want to present ourselves to the world,' he said.

'In difficult times, it is even more important to dress better to chase scarce jobs or even scarcer clients.'

The choice of Hong Kong as the location of the mega-store had more to do with the highly centralised way of life here than the economy.

'In Tokyo, a mega-store may not work because people from different parts of the city tend to shop in different areas,' Mr Meier said.

Earlier this year, Giorgio Armani took back its Hong Kong distribution licence from Joyce.

The company believes Asia will play a large role in its future. Sales in Asia for the company are expected to double over the next five to six years.

While Japan has traditionally been one of its largest markets worldwide, China is fundamentally untapped - the company's only presence is a small boutique in Beijing.

During the course of the next five years, Armani boutiques are expected to sprout up in China's major cities.

'China will eventually be a big part of our business - even if it is not as soon as the next one or two years,' Mr Meier said.