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Enter the Dragon

Bosideng’s founder sees London as the launch pad for its European ambitions – but will the Chinese retailer fire shoppers’ imaginations?

With Western fashion businesses flocking to China over the past few years, it was only a matter of time before we began to see Chinese brands and retailers heading West in their bid to become truly international players.

Naturally, central London’s prime shopping hot spots are top of the list for any aspiring brand to make its international presence known. So it was – albeit with less fanfare than that of the recent arrivals of US retailers Forever 21 and Victoria’s Secret – that Chinese feather-down clothing specialist Bosideng threw open the doors to its London flagship on the corner of South Molton Street and Oxford Street in July.

With a network of more than 10,000 stores across China, a 19% increase in sales to £837m and a 27% rise in gross profits to £418m for the year ended March 2012, the retailer’s founder and chairman Gao Dekang says the store opening – which represents an investment of £30m – is significant in that it will act as the company’s European headquarters and signal the start of Bosideng’s international expansion.

In town for the store’s official October launch last month, Dekang tells Drapers as we sit down at The May Fair Hotel in London that, having visited the capital several times before, he felt it was the best place for establishing its menswear business globally. “This is an important step for us in internationalising our company,” he says. “London is a major business hub for menswear and we also really want to use the store to test the water here and use it as the basis for expansion in Europe.”

He says the decision was also based on Bosideng’s greater understanding of the UK market, as a result of its close working relationship with 83-store UK menswear retailer Greenwoods, which Bosideng has provided manufacturing services for. Dekang declines to reveal what the flagship’s initial trading has been like, but says: “We have really established a good local team [here in the UK]. I am confident we will have a good start here, and it’s very likely we can replicate this pattern somewhere else, within and outside the UK.”

While there are no concrete plans for further international expansion in place, Dekang does reveal that Bosideng is eyeing potential stores in markets such as Italy, and also in the US, where it already wholesales. “We have plans to establish a retail presence in the form of another flagship store somewhere like New York, if we can acquire the freehold of a property as we have done in London.”

However, he is adamant that for now the emphasis remains on servicing the European market with the UK flagship. “At this moment we’re quite focused on this first store and making sure it works, because we are trying a new company pattern, which is local design and manufacturing in Europe and targeting a specific European consumer,” he explains. “This learning experience will provide our foundation for success in other markets.”

With an offer targeted at men aged 25 and over, Dekang says Bosideng sits alongside premium high street retailers such as Ted Baker and Reiss, and to some degree Hugo Boss. In a bid to appeal to European tastes the store only stocks Bosideng’s new premium menswear collection, created by British designers and founding members of the Pretty Green team Nick Holland and Ash Gangotra, 90% of which is manufactured using European cloths and mills. The company is also manufacturing in the UK, producing its shoes and leather accessories on these shores, and using British fabrics throughout its collection.

Despite inflated manufacturing costs in China as a result of increased labour costs, Dekang insists decisions over where to manufacture are quality rather than price led. “Really, we try to use the best supplier, quality-wise. Though there are certainly advantages to manufacturing in Europe, which offers shorter lead times and smaller minimum quantity orders.”

Dekang is confident that this focus on quality will appeal to European consumers. However, Simon Burstein, chief executive of neighbouring South Molton Street retailer Browns, the designer indie, questions whether there is an audience for Bosideng. “I think it’s a middle-of-the-road brand. It looks pretty tasteful but does it have an audience here? Who is it pitching to? It [has] a Paul Smith kind of look. As far as I’m concerned it doesn’t have an identity. Is it English, is it Chinese? I don’t know which market he’s aiming for.”

Plans are in place to launch a transactional website for summer 2013, and conversations are in progress with “several” high-end UK department stores for concessions that are likely to open next year.

Dekang says that increased social mobility and growth in the spending power of Chinese consumers have been the foundation of Bosideng’s success – which was established by Dekang in 1976 – and enabling it to expand overseas. “Only within China, such a big country and with an almost double-digit percentage growth [in GDP] every year for the past 20 years, has a company like Bosideng been able to grow to its current size. We talk about best-sellers each year and we talk about six or seven-digit quantity sales of a single style, which seems impossible in other countries.”

As China’s number one down-clothing retailer for the past 17 years, Dekang says Bosideng is a “pioneer” for Chinese fashion retailers entering the world stage, and that he expects more to follow. “Actually, before and after the Bosideng flagship opened here we received quite a few delegations from different businesses within the Chinese fashion sector, which want to learn about the market and find out how we are doing, what challenges we have faced and how we have coped with those. So I think others will follow suit.”

Mintel retail director Richard Perks agrees that we’re likely to see further Chinese fashion retailers setting up shop in the UK, as successful domestic businesses buoyed by the affluence and spending power of the growing middle-class look to replicate that success elsewhere. However, he adds: “At the moment Bosideng has just one high-profile outlet. If it is to expand and succeed in the UK it will have to learn how to adapt that format to the local market. That’s difficult and it’s a stumbling block for many retailers who expand outside their own market. [However] there is no reason why it should not be able to do this, and having done so more will follow.”

Dekang reveals that the Chinese government is watching Bosideng’s progress and using it as a case study to advise other Chinese businesses planning to do the same, and says he would welcome other Chinese fashion businesses entering the UK market.

Certainly for Bosideng, international expansion represents the next stage in the company’s evolution, and it seems the Chinese retailer is here to stay. Dekang says: “Establishing a globally renowned brand is a personal ambition as well as the company’s long-term strategy.”

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