Paul Smith Re-Enters China to Woo Wealthy Customers

Paul Smith Ltd., the British fashion label, plans to open 25 outlets in China in the next five years as it re-enters the world’s second-largest economy to tap wealthy customers for growth.

The brand, worn by former English footballer David Beckham and actor George Clooney, will focus on establishing outlets in Tianjin, Beijing, Shanghai and Chengdu and has no plans for smaller cities in the next five years, Paul Smith, the founder and designer of the fashion house, said in an interview.

“It’s starting to be the time when we can have a success in China,” the 66-year-old owner with long silver gray hair dressed in navy blue suit said in Beijing at the opening of his first flagship store in China yesterday. “Chinese people now are traveling a lot to London, Paris, Milan and New York” and they have become increasingly aware of the brand, he said.

Paul Smith joins Prada SpA and Burberry Group Plc in expanding in China as consumers’ rising purchasing power draws global brands to Asia. Urban disposable income per capita in the world’s most populous country jumped 10.8 percent to $1,196 in the first quarter from $1,079 a year ago.

Known for slim-fitting suits and bold colors, Paul Smith is returning to China after an unsuccessful first attempt in 2002 because at that time most consumers in the country with new money preferred brands that could show off wealth, he said. The company had exited China in 2007.

“We have more customers in China now who want discreet and more understated simple design,” Smith said. “Paul Smith isn’t a brand for people longing for an association of a logo.”

Flagship Store

Painted in pink and yellow, the 359-square-meter duplex store is located in Sanlitun in Beijing, a shopping district with stores including Prada’s Miu Miu and Kering’s Balenciaga.

The closely held company, owned 60 percent by the founder, has shops in London, Paris, Hong Kong, Tokyo and New York. Its Beijing flagship store, as well as other new outlets in China, will be managed in partnership with ImagineX Group, a distributor whose affiliate company is Hong Kong luxury department store Lane Crawford.

“To expand in China as an independent designer, the biggest challenge is getting the right store location,” Alice Wong, executive director of ImagineX Group, the label’s Greater China distributor, said in a separate interview. “The designer must first persuade the landlord before courting customers.”

Chinese consumers last year overtook U.S. shoppers to become the world’s biggest buyers of luxury goods, accounting for 25 percent of global sales through purchases at home and abroad, Bain & Co. said in a report in December.

ImagineX is a Hong Kong-based brand management and distribution company that represents about 20 international brands in Asia, according to its website.

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