BEIJING: Polo Ralph Lauren, the luxury lifestyle group, is planning to open up to 15 new stores a year in China and Hong Kong, as it seeks to offset the impact of the financial crisis on consumer spending patterns in many other core markets.
The company is adopting a new approach in the world's most populous nation, based on the idea of strengthening its brand credentials, and will focus its efforts on areas such as Shanghai and Beijing.
It currently has ten individual stores in Hong Kong and just one standalone store in China, but is seeking to increase this figure at a rapid rate.
George Hrdina, president of Ralph Lauren's Asian operations, said "we were going to come at this business aggressively anyway, but now it's even more of a reason as the businesses in the US and Europe have flattened."
"We do more Ralph Lauren business on the island of Manhattan, New York, than we do in Hong Kong and China. We're probably a little behind the other luxury retailers in entering this market," he added.
"Our goal on a freestanding basis is to open 10 to 15 stores annually ... we will now control the product, the quality, the branding."
Shaun Rein, managing director of the China Market Research Group, argued "the Chinese market for luxury products is still growing very well. The consumers in China are still spending money, although some are hit by the financial crisis."
"They're looking for better value, they're starting to buy products like bags that can be used everyday rather than a shirt that can be worn once a month," he added.
Moreover, Rein warned that, thus far, Polo Ralph Lauren has not done a "very good job at marketing, positioning and store development for the China market, and they also probably were hit fairly hard by piracy."
Last month, Joe Wong, managing director for Gucci Group in Hong Kong, China and Macau, said "Asia, particularly China, is possibly the solution" for many of the ills facing the luxury sector, and it appears this view is becoming increasingly accepted across much of the industry.
Data sourced from Bloomberg; additional content by WARC staff