J.Crew to Open First Asian Store in Hong Kong
J.Crew Group Inc., the apparel retailer whose customers include U.S. First Lady Michelle Obama, is planning its first Asian store in Hong Kong targeting tourists from mainland China that totaled 28 million last year.
The retailer may open the Hong Kong store as early as next year and is also looking for sites in Beijing and Shanghai, Chief Executive Officer Mickey Drexler said in an interview in Hong Kong.
Closely held J.Crew is pushing to reach Chinese shoppers as competition heats up and economic growth slows in the world’s most populous nation. The apparel company will join brands including Abercrombie & Fitch Co. (ANF), Gap Inc. and Burberry Group PLC (BRBY) in courting tourists from China’s mainland in the former British colony.
“We feel that we’re ready to go international,” said Drexler. “Going international is a strong learning curve and it could distract us from building our business in the U.S., but we feel that the time is right now.”
China’s apparel market is forecast to more than triple to 1.3 trillion yuan ($204 billion) by 2020 from 2010 as rising incomes fuel demand, the Boston Consulting Group Inc. said in a report last year.
“Brands entering China only now have still a lot to fight for,” said Yuval Atsmon, a Shanghai-based partner at McKinsey & Co. “Even a slower growing China would still deliver more apparel growth than any other market in the world.”
Founded in 1983, J.Crew has more than 200 stores in the U.S. and Canada and is preparing to expand in Europe and Asia. Drexler said today that the company will open a store in London next year, ahead of Hong Kong. In 2008 the company pulled out of Japan, where it had some licensed stores through a partnership. It presently doesn’t have any stores outside the U.S. and Canada.
The U.S.-based retailer will also sell items including clothes and shoes at Lane Crawford stores in Hong Kong and China beginning in October, according to a June statement from the companies.
Shareholders of J. Crew in March 2011 voted in favor of a takeover by TPG Capital and Leonard Green & Partners LP. Drexler, known for engineering a turnaround at Gap Inc. (GPS) earlier in his career, is also a board member at Apple Inc. (AAPL)
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