China Goes Luxury

China's first luxury brand hasn't had a smooth international ride. Launched in Hong Kong in 1994, Shanghai Tang opened a ritzy 12,500-square-foot New York flagship store on Madison Avenue in 1997, closed it less than two years later due to sluggish sales, and quietly relocated to a smaller location in 2001. But four years after the arrival of new CEO Raphael le Masne de Chermont and Creative Director Joanne Ooi, Shanghai Tang seems to be back on track.

While le Masne won't disclose figures, he says worldwide sales have grown 43% in the last year, and American sales (at boutiques in New York and Honolulu) are up 50%. Compagnie Financière Richemont -- the Swiss luxury goods company that bought a majority stake from founder David Tang in 1998 -- has embarked on an ambitious expansion plan (see BW, 7/21/03, "Richemont in a Rut"). In 2005, new stores opened in Zurich, Shanghai, Tokyo, and Bangkok.