HK ap­parel chain I.T says main­land young­sters now em­brac­ing its la­bels that of­fer ‘in­spi­ra­tion’

China Daily (Hong Kong) - - HK | BUSINESS - By EVE­LYN YU in Hong Kong eve­lyn@chi­nadai­lyhk.com

Hong Kong fash­ion icon I.T Ltd boasts hav­ing sunk its roots well in the vast Chi­nese main­land mar­ket since mak­ing its first bold move in 2002 when it launched its maiden store in Shang­hai.

With more than 550 stores now in full swing across 28 main­land cities, the ap­parel chain is pulling out all the stops in back­ing up the m o m e n t u m , s ay i n g Ho n g Kong’s ad­verse eco­nomic cli­mate — soft con­sumer pace plus tow­er­ing rents and la­bor costs — is not giv­ing it the com­fort it needs.

In its an­nual re­port is­sued in June, I.T recorded a 16-per­cent jump in to­tal sales on the main­land to HK$3.5 bil­lion, against a 6. 3 -per­cent drop in sales to HK$3.2 bil­lion in Hong Kong, at­trib­uted to an on­go­ing re­tail slump. The group’s net profit soared 50 per­cent to HK$315 mil­lion amid a HK$65-mil­lion for­eign ex­change loss as a re­sult of the con­ver­sion of the group’s ren­minbi de­posits into Hong Kong dol­lars the pre­vi­ous year.

Gov­ern­ment sta­tis­tics showed that the SAR’s re­tail busi­ness — one of the worsthit trades since tourist ar­rivals, no­tably from the main- land, slowed dras­ti­cally in the past few years — ex­pe­ri­enced an 8 -per­cent, year-on-year plunge in 2016 — a 17-year low — while sales of cloth­ing dipped 5.1 per­cent over the pre­vi­ous year’s.

I.T runs a unique, multi­brand and multi-layer busi­ness mode fea­tur­ing a com­bi­na­tion of in-house and li­censed global brands.

Its 10 in-house l abels, in­clud­ing 5cm, iz­zue, :CHOCOOLATE, b+ab and AAPE, are all the rage among young cus­tomers. The chain also of­fers an ar­ray of in­ven­tive la­bels from around the world, both es­tab­lished and emerg­ing, and has more than 300 brands at ei­ther its flag­ship multi-brand stores or ex­clu­sive shops.

Ke n n y C h a n Wa i - kw a n , ex­ec­u­tive di­rec­tor and chief ex­ec­u­tive of­fi­cer of I.T China, told China Daily that while in-house brands make up 60 per­cent of the group’s rev­enue, the in­ter­na­tional brands ac­count for the other 40 per­cent.

Be­hind the suc­cess of its hun­dreds of world la­bels is the fash­ion buy­ing sys­tem that Chan is proud of.

I.T has more than 50 fash­ion buy­ers, while its fash­ion scouts, with their eyes glued to the world­wide fash­ion trend and be­ing able to an­tic­i­pate the de­sir­abil­ity of ap­par­els and ac­ces­sories, are bring­ing a steady stream of in­spi­ra­tional brands into the com­pany’s port­fo­lio.

I .T h a s n u r t u r e d m a n y un­known brands that were once new and un­known, like Kenzo, whose tag could only be seen at just a few ex­clu­sive shops on the main­land years ago. The group’s ex­ten­sive dis­tri­bu­tion chan­nels have helped the brand find its way into the main­land’s crit­i­cal masses. Kenzo’s sym­bolic tiger-mo­tif sweat­shirt is a now a “must have” for many young Chi­nese peo­ple.

Chan be­lieves that fash­ion buy­ing, which pro­vides bet­ter va­ri­eties to cus­tomers, serves as a good al­ter­na­tive to the tra­di­tional depart­ment stores that house repet­i­tive brands and col­lec­tions.

In 2013, I.T opened up­mar­ket depart­ment store Ga­leries Lafayette through a 50-50 joint ven­ture with the French com­pany. Ga­leries Lafayette’s 10 -stor y store in Paris is a ma­jor at­trac­tion for Chi­nese tourists. Yet, when the fash­ion store, known for its ex­clu­sive cou­ture selections, en­tered the main­land mar­ket, it didn’t make the grade, record­ing mil­lions of yuan in losses in its first two years of operation.

But, Chan thought it was nor­mal as it would take time for Chi­nese con­sumers to ac­cept new things, adding that the shop­ping mall is the black this year.

He re­called I.T ’s 15 years op­er­at­ing on the main­land, say­ing it had been a hard time with a Hong Kong en­ter­prise ven­tur­ing into a new econ­omy it barely knew.

“More than 10 years ago, when we opened the first store in Shenyang, we had no idea that peo­ple in north­east­ern China pre­ferred color­ful cos­tumes. Our col­lec­tions, mostly in black, white and grey, didn’t ap­peal to them. The over­coats were not thick enough against the se­vere cold, nor did the size of Hong Kong cloth­ings fit the taller peo­ple in the north­east­ern re­gion. The busi­ness was tough and we were forced to shut it down.”

With 15 years of care­ful re­search, Chan said, I.T has got to know the re­gional char­ac­ter­is­tics and lo­cal peo­ple’s pref­er­ences in each city and will now re­mind var­i­ous de­sign­ers with the aim of reach­ing out to main­land shop­pers.

“To­day, Chi­nese young­sters are shrewd, fully con­scious of the lat­est trends in China and over­seas. They are look­ing for fresh and fun fash­ion that can iden­tify their per­son­al­i­ties. Their pur­chas­ing power has also grown, mak­ing I.T a great fit for young shop­pers to­day.”

The group’s lat­est ad­di­tion has been a store over 2,000 square me­ters which opened in Hangzhou last month. It has also ac­quired a piece of land in Kun­shan — a countylevel city ad­ja­cent to Shang­hai — as its lo­gis­tics cen­ter which, upon com­ple­tion in 2019, is e xpec ted to keep lo­gis­tics costs down.

I .T s e e k s t o e x p a n d i t s foothold in main­land cities both new and old. “In three to five years, we hope to see new stores in 36 cities, ba­si­cally cov­er­ing ev­ery province. We’re also look­ing for po­ten­tial three and four-tier cities to show­case our newly cre­ated in-house brands,” said Chan.

“After years of pain­stak­ing ef­forts, we’ ve found so­lace. We’ve fi­nally en­tered into the hon­ey­moon phase with Chi­nese shop­pers.”

I.T Ltd’s to­tal sales on the Chi­nese main­land in 2016-17 fi­nan­cial year They (Chi­nese young­sters) are look­ing for fresh and fun fash­ion that can iden­tify their per­son­al­i­ties. Their pur­chas­ing power has also grown, mak­ing I.T a great fit for young shop­pers to­day.”

PRO­VIDED TO CHINA DAILY

Hong Kong fash­ion group I.T’s store in Cause­way Bay. The group says its abil­ity to nur­ture many un­known brands has en­abled them to reach the mass mar­ket on the Chi­nese main­land, while the grow­ing spend­ing power of main­land cus­tomers has given the group the im­pe­tus to spread its ten­ta­cles na­tion­wide.

Kenny Chan Wai-kwan,

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