Lap of luxury

HONG KONG: Italian luxury goods company Loro Piana expects its retail sales in the Chinese mainland to be five times the current amount in the coming years, and remains positive about the market despite the global financial crisis.

After opening its first store in the mainland in Shanghai last year, it now runs three others in Beijing, Changchun in Jilin province and Shenyang in Liaoning province.

The company will "wait a bit for the reaction" before deploying new stores, but there might be one or two more in top cities like Beijing and Shanghai, co-CEO and chairman Pier Luigi Loro Piana tells China Business Weekly recently.

Loro Piana says he's upbeat about the opportunities in China for now and the near future.

"China will suffer less (from the global financial crisis) than other countries given its strong reserve and internal market," he says, adding the Chinese government's policy to inject a significant amount of money to the market would stimulate demand.

The Loro Piana company began as a wool fabric merchant at the beginning of the 19th century. The company has since become the largest cashmere manufacturer and biggest single purchaser of the world's finest wools.

In 1998, the company made a foray into the retail business, selling lines for men, women and children, and home furnishings and accessories. Its boutiques are located in Europe, the US and Asia.

Its sales rose 9 percent last year, to 420 million euros, with retail accounting for 60 percent of the total.

Asia contributed 22 percent of the sales, which could grow up to 35 percent in the future, Loro Piana says.

It has four stores in Hong Kong, which, together with some in other countries, have been destinations for wealthy travelers from the Chinese mainland.

Loro Piana says the company differentiates itself from the mainland fashion players by catering to wealthy individuals who keep a low profile.

"We try to communicate with consumers. It takes a bit of time to be known by our customers," he says.

The company prefers 'word of mouth' for building its brand awareness, rather than fashion shows, which it calls "a longer but better way."

It is looking into supporting events such as classic car races or golf tournaments in China.

The company has been supporting Italian and international equestrians since 1985. It was the official supplier of the Italian Olympic Event and Dressage teams at the Beijing 2008 Olympic Equestrian Events held in Hong Kong and the Italian delegation at the 2008 Olympic Games in Beijing.

It also sponsors some other premium sporting and leisure events, such as polo, sailing and vintage car competitions.

In China, Loro Piana sources cashmere, one of the principle raw materials from which it produces fabrics, knitwear and clothing.

(China Daily 12/22/2008 page6)