Nov. 1 (Bloomberg) -- Chinese globetrotters seeking some Western pizazz for their wardrobes in the chic boutiques of Place Vendome in Paris or London’s Mayfair are increasingly likely to end up pondering altogether more familiar garb.
Shanghai Woo, a homespun Chinese maker of scarves, plans outlets in Paris, London, Milan and New York over the next three years. Bosideng International Holdings Ltd., seller of 500 yuan ($82) down jackets in China, is counting on a new store in London’s South Molton Street to lend it some allure. Hong Kong-listed Trinity Ltd. this year started selling its Kent & Curwen menswear line at New York’s Bloomingdale’s.
A fondness among Chinese shoppers for Western labels has long helped companies from Nike Inc. to General Motors Co. outsell Asian rivals in the world’s most populous nation. Now, local companies are seeking to give their brands -- and sales -- some extra oomph at home by setting up shop in the world’s fashion hotspots and placing products in Hollywood blockbusters.
“Chinese consumption only started taking off about seven to eight years ago,” said Stephen Sun, chief executive officer for Shanghai Woo, which sells luxury scarves and shawls priced between 2,000 to 5,000 yuan at its 37 mainland stores. “How do customers know you are a credible brand? They see you selling near established brands in Europe.”
Stella International Holdings Ltd., a Hong Kong listed shoemaker which has been expanding overseas, closed 1.5 percent higher at HK$19.38. Shanghai Metersbonwe Fashion & Accessories Co., which has tried product placement, gained 2.6 percent to 14.09 yuan in Shanghai trading.
Chinese brands have often been associated with low prices rather than high fashion. They are looking outward and seeking to change that image in the face of rising competition at home from international heavyweights such as Hennes & Mauritz AB and Coach Inc. Foreign capitals -- the traditional bastions of luxury companies such as Christian Dior SA and LVMH Moet Hennessy Louis Vuitton SA -- are becoming important locations to market to Chinese shoppers as more travel overseas.
Hong Kong-listed Bosideng, which sells jackets and winter coats on the mainland, invested $49 million last year on a six-story flagship store in London’s West End. It hired British designers Nick Holland and Ash Gangotra to design its collection that includes formal shirts from Italian fabric that are sold at 90 pounds ($145).
“With so many Chinese traveling abroad it’s important for you to have ‘showcase’ stores overseas,” Julie Sun, Bosideng’s vice-president for corporate strategy and investor relations, said in a September interview. “If they go to New York’s Fifth Avenue, Paris, Milan, and they see the store, it would help your sales and brand recognition.”
Europe will be among the top destinations for the 94 million mainland Chinese expected to travel abroad by 2015, according to McKinsey & Co. Almost a third of Chinese luxury buyers will shop there this year, the firm has estimated, up from a fifth last year.
Bosideng agreed to pay 40 million yuan in October for 96 percent of 88-store U.K. clothing retailer Greenwoods to sell its own coats abroad. It also wants to partner with or buy a European luxury coatmaker to go upmarket, Sun said.
Fast-fashion apparel firm Shanghai Metersbonwe Fashion & Accessories turned to product placements in a Hollywood movie to boost its cachet.
Shia LaBeouf, star of the 2011 science fiction movie “Transformers 3: Dark of the Moon,” wore the company’s MTEE T-shirt brand in a scene with his girlfriend. The results proved very successful and the company will consider more movie tie-ups, Metersbonwe said in a statement.
Chinese companies are seeking an international presence because “what the brand stands for at home is hard to change or upgrade,” said Doreen Wang, Beijing-based head of client solutions at Millward Brown China, which runs annual brand surveys. “Now they have the opportunity to change consumers’ perception.”
Trinity already owns some international brands and is seeking to expand their reach. Besides Bloomingdale’s, the company started selling Kent & Curwen -- a veteran British label it bought in 2008 and bills as “outfitters to gentlemen of sport” -- at Nordstrom Inc. outlets and London’s Harrods this autumn.
Stilettos & Boots
“We are very active in developing our brands in Europe and U.S.,” Sunny Wong, managing director at Trinity, said in an e-mail, “The purpose of increasing our exposure in these countries is to globalize the brands, and a good benefit is to cater to the influx of Chinese tourists to these countries.”
Some Chinese brands are hoping to transform themselves into international names. Stella International Holdings, the shoemaker that manufactures for companies such as Prada SpA, is trying to expand its own brand overseas. It opened a boutique on Boulevard Saint Germain in Paris last year to sell Stella Luna stilettos and boots in the range of 250 euros ($345) to 600 euros.
“As our home is China, consumers there remain our big focus, but they were not the audience we had in mind for our overseas expansion,” the company said in an e-mailed statement. “The main focus of our overseas expansion is to build a global brand.”
The shoemaker plans more stores in Paris and other parts of Europe.
“Today’s fashion is defined by the West, with the finest, the coolest, and the most trendy coming from New York, Paris,” said Adam Xu, a Shanghai-based director at Booz & Co. “It is not only the Chinese, but also a lot of Asia which looks to the West for fashion.”
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