USA: Badgley Mischka and Kate Spade New York plan big expansions in China - among the first wave of American luxury labels rushing to cater to the Asian country's huge appetite for fashion
Record ID:
836384
USA: Badgley Mischka and Kate Spade New York plan big expansions in China - among the first wave of American luxury labels rushing to cater to the Asian country's huge appetite for fashion
- Title: USA: Badgley Mischka and Kate Spade New York plan big expansions in China - among the first wave of American luxury labels rushing to cater to the Asian country's huge appetite for fashion
- Date: 11th February 2012
- Summary: NEW YORK CITY, NEW YORK, UNITED STATES (RECENT) (REUTERS) (SOUNDBITE) (English) DAVID WOLFE, CREATIVE DIRECTOR OF THE DONEGER GROUP, FASHION FORECASTER, SAYING: "The luxury market became saturated, and over-saturated in the Western world. So the smart thing to do is look for virgin customers. People who are becoming more affluent, and haven't been able to access all of the luxury goods." NEW YORK CITY, NEW YORK, UNITED STATES (FEBRUARY 6, 2012) (REUTERS) VARIOUS OF KATE SPADE NEW YORK HANDBAG DISPLAY WALL WITH KATE SPADE NEW YORK BAGS VARIOUS OF CRAIG LEAVITT, CEO KATE SPADE NEW YORK, TALKING TO HIS STAFF (SOUNDBITE) (English) CRAIG LEAVITT, CEO KATE SPADE NEW YORK, SAYING: "Price-point wise we are a notch below the European luxury brands, and therefore have a broader appeal to the growing middle class. And it's also product that the consumers using not only for special occasions but also for everyday." VARIOUS OF LEAVITT LOOKING AT MITTENS KATE SPADE NEW YORK IPAD COVER (SOUNDBITE) (English) CRAIG LEAVITT, CEO KATE SPADE NEW YORK, SAYING: "We expect that over the next five years about two thirds of our business will actually be done outside of the United States. And of that we think that China will be the most important market outside of the US. So it's a very, very important focus for us, and that's why we are very studied in our approach to the market and will be investing significantly." VARIOUS OF KATE SPADE NEW YORK BAGS VARIOUS OF KATE SPADE NEW YORK WATCHES
- Embargoed: 26th February 2012 12:00
- Keywords:
- Location: Usa, Usa
- City:
- Country: USA
- Topics: Business,Entertainment,Industry
- Reuters ID: LVA7NVNVUJFMD71WBPHMD6DODUB2
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- Story Text: Go East, American fashion designers - all the way East to China.
By 2015, China will account for 20 percent of the global luxury market. Within three years, spending is expected to rise to $27 billion - up from around $10 billion in 2009, consulting firm McKinsey & Co. predicts. The demand for American luxury fashion in China is reflected at Mercedes-Benz Fashion Week, which says China is home to about 30 percent of the media registered to cover the shows.
Badgley Mischka, the New York luxury label known for its dazzling red-carpet gowns, will double the number of its stores in China this year, according to Veronica Chou, president of Iconix China Ltd. So far, Iconix China has launched Badgley Mischka and six other U.S. fashion brands in that country through deals with Chinese apparel partners. Iconix Brand Group, based in New York, owns the Badgley Mischka label. (The company is traded on Nasdaq under symbol ICON.) Kate Spade New York, whose handbags in bright colors with witty details (red with black polka dots for Fall 2012) inspire lust in young American fashionistas, sees China as the next big frontier for luxury fashion. Within the next five years, China will be its most important market outside the United States, CEO Craig Leavitt told Reuters in an interview before the start of New York Fashion Week. (Kate Spade is owned by Liz Claiborne, Inc., whose stock trades on the New York Stock Exchange under symbol LIZ.) These designers are part of the first wave of American luxury labels that plan to take advantage of China's strong economy and rising class of wealthy consumers. They're following in the stiletto tracks of European luxury houses Louis Vuitton, Chanel, Gucci, Dior and Armani - the top five brands among Chinese consumers over the past two years, according to consulting firm Bain & Co. The best-known American fashion house in China is Ralph Lauren, which is traded under the symbol RL on the New York Stock Exchange.
Mark Badgley, who is half of the design team of Badgley Mischka, talked with Reuters about the Chinese woman's desire for luxury fashion in their Manhattan showroom just a week before their Fall 2012 runway show on Tuesday (February 14) in New York.
"I think the Chinese consumer is certainly one of the most savvy shoppers globally there is right now. I think the femininity, the luxury and the drama of our collection is appealing to the Chinese customer."
The elaborate beading on Badgley Mischka gowns and cocktail dresses appeals to Chinese women who want something shiny for weddings and galas, Mark Badgley explained. To make the beading look more vintage like Old Hollywood, he and his design partner, James Mischka, often run the sequins and other baubles through the dishwasher a few times to give them the patina of age.
A red beaded cocktail dress is an example of one of Badgley Mischka's styles that is popular with their customers in China, where red is the color of joy.
James Mischka, designer at Badgley Mischka, said, "I think given the world economy and things are trending, and the opportunities over there, it would be foolish for an American designer to ignore the Chinese market. It's a huge upcoming market. We're saying upcoming market. It's an established market, and we're sort of starting to crack it."
With the Chinese woman in mind, Badgley Mischka makes some slight design adjustments to fit their bodies.
"We do a little bit of tweaking for the Chinese market in terms of the proportions and the fit," James Mischka said. "But we really know that consumer wants what Badgley Mischka does, basically what goes down the runway and what we do in America is what goes to China directly."
Veronica Chou, president of Iconix China, said she is scouting prime retail locations for the Badgley Mischka expansion. Her father, Silas Chou, owns a major interest through his company in Michael Kors Holdings Ltd (symbol KORS), which recently went public and is listed on the New York Stock Exchange.
"I think the most important way is to open stores," Chou told Reuters. "You need to get the network out. We need to get the customers to see the product and have the store experience. And we have done it successfully, as I said, because of lots of great Chinese partners who have been in the market for 10, 15 years. You know, they are doing their own brands, but now they want the real American thing."
Bloomingdale's flagship store in New York is a major shopping destination for Chinese tourists.
With the expansion of American luxury fashion houses in China, these customers will be able to buy more of what they want in their own country.
Designer Jason Wu, who shot to fame with the design of First Lady Michelle Obama's inaugural ballgown, showed a Fall 2012 collection on Friday (February 10) that envisioned an imperial Chinese dynasty. He created gorgeous gowns and daywear in bright reds, black and other strong colors with gold braid and beads.
David Wolfe, creative director of The Doneger Group, a New York fashion forecaster, said it's no accident that American luxury fashion companies are expanding in China.
"The luxury market became saturated, and over-saturated in the Western world. So the smart thing to do is look for virgin customers - people who are becoming more affluent, and haven't been able to access all of the luxury goods."
The rise of a middle class in China is a golden opportunity for Kate Spade New York, its CEO Craig Leavitt said. His company recently signed a 10-year joint venture deal for expansion in China with E.Land, a South Korean company with extensive retail experience in China.
"Price-point-wise, we are a notch below the European luxury brands, and therefore have a broader appeal to the growing middle class," Kate Spade New York CEO Craig Leavitt told Reuters, in a nod to the price range of $300 to $400 for a typical Kate Spade handbag, compared with $2,000 to $4,000 or more for a Chanel or a Louis Vuitton bag.
"And it's also product that the consumers are using not only for special occasions, but also for everyday."
Bright colors like red, turquoise and green feature prominently in the Kate Spade New York line for Fall 2012 -- and brights play big in China, he noted.
The growth potential in China is huge, he said.
"We expect that over the next five years, about two-thirds of our business will actually be done outside of the United States. And of that, we think that China will be the most important market outside of the U.S.," Leavitt said. "So it's a very, very important focus for us, and that's why we are very studied in our approach to the market, and will be investing significantly."
Chinese store buyers and investors are expected to be highly visible at major designers' shows, including Badgley Mischka, during Mercedes-Benz Fashion Week in New York. The shows, featuring the collections of about 90 designers, will run through Thursday (February 16). - Copyright Holder: REUTERS
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