Tired Western Brands Find New Life in Asia
Faded and forgotten Western brands are being dusted off and brought back to life by companies in Asia targeting the burgeoning number of people looking for labels to match new middle class lifestyles.
Asians have been buying or licensing fashion names — many of them European with long and rich histories including royal connections or haute couture origins — that have fallen out of favor back home, as they seek to lure the region's newly affluent.
Among them are Aquascutum, founded in 1851 and whose trenchcoats were worn by British officers in the Crimean and two World Wars. The British label was popular with movie stars in the 1950s and '60s but in later years its appeal fizzled. Various owners tried to turn it around before a Hong Kong company snapped up the Asian rights in 2009 and now runs dozens of Aquascutum stores in China and elsewhere.
Meanwhile, Westerners are picking up on the idea, with one British startup aiming to bring dormant luxury pen, whisky and British butcher shop brands to Asia's growing middle classes.
The strategy of acquiring and revitalizing tired brands has proved to be especially successful in China, home to a huge number of nouveau riche combined with a culture that is extremely brand and status conscious.
China is forecast to be the world's third-largest luxury market within five years, according to a survey by Bain & Company released in May. Taking into account purchases made abroad by globe-trotting Chinese, they are already the second-biggest spenders on luxury goods, experts at Bain said. China's demand for brand-name consumer goods is also reflected in Italian fashion house Prada's listing this year on Hong Kong's stock market.
"Chinese are a lot more brand driven than other countries, and also they have rapidly increasing income but their brand product knowledge is sort of behind their spending power. That creates an interesting opportunity," said Vincent Lui, a Hong Kong-based partner at Boston Consulting Group.
While top-tier brands such as Gucci or Chanel may be out of reach, it's possible for companies to buy up lesser known second- or third-tier brands, Lui said. "Then you sort of repackage it in China, you try to rejuvenate it here — it's kind of hard to rejuvenate it somewhere else. Here you're starting with a blank sheet of paper."
A pioneer of this strategy is Hong Kong-based Trinity Ltd., which owns or licences a handful of heritage British and Italian menswear labels that have been elbowed aside in their home markets by newer fast-fashion outlets.
Three years ago, Trinity bought Kent & Curwen, an English clothing label that started out making school, club and regimental military ties in 1926. The brand's website features faded black and white images of sportsmen wearing cricket whites aimed at evoking English traditions.
"It's really propagating the story that these brands have strong heritage, long history and the Chinese customers believe in it," said Sunny Wong, the company's group managing director.
"It's very common to find customers walking into a shop and spending a long time in the shop not only trying on clothing they like but asking, 'What is this brand?' There's a big curiosity in why a brand can be so active over 200 years or more."
Trinity operates 95 Kent & Curwen stores in mainland China but the name has nearly disappeared in Britain, where it only has one shop.
But don't tell that to the mainland Chinese tourists who flock to neighboring Hong Kong for upmarket shopping and believe such brands remain coveted in their places of origin.
"Living standards for people in China have improved so we would like to buy these international brands," said a man who only gave his last name Jiang, from Dongguan in southern China, as he browsed at the Kent & Curwen outlet in an upscale Hong Kong mall.
Trinity is also the Asian retail licensee for Gieves & Hawkes, a storied Savile Row tailor with a stuffy reputation that is best known for dressing Prince William for his wedding to Kate Middleton. The tailor, which is owned by another Hong Kong company, Wing Tai Properties Ltd., has a history stretching back to 1771 and boasts three royal warrants, signifying its status as an approved supplier to the royal family.
Earlier this year, Trinity purchased French fashion label Cerrutti 1881, founded by Italian designer Nino Cerrutti, who gained fame in the 1980s for outfitting stars such as Michael Douglas, Richard Gere and Bruce Willis in their movies.
Trinity, controlled by privately held Li & Fung (1937) Ltd., now has about 330 stores in mainland China under various labels, and plans to open 50 more by the end of the year. Trinity reported last month that first-half profit rose 63 percent to Hong Kong dollars 240.1 million ($31 million) on strong sales.
Hong Kong's YGM Trading Ltd., which has the Asian rights to the Aquascutum clothing brand that describes itself as "quintessentially British," operates 59 Aquascutum outlets in mainland China and 32 in Hong, Macau and Taiwan.
Chinese conglomerate Fosun International bought a 7.1 percent stake last year in French resort operator Club Med, becoming one of its biggest shareholders in a partnership aimed at making China the second biggest market for Club Med in the next five years. The French company, founded in the 1950s, had pioneered all-inclusive vacation packages but by 2000 had an outdated image.
Adult magazine publisher Playboy Enterprises Inc., which has seen its profits and popularity hit by competition from adult websites, has been licencing its name in merchandising deals across Asia and to a nightclub in Macau as it seeks to regain profitability. The trend has caught the attention of a group of British investors, who started a company aimed specifically at finding forgotten brands and reviving them.
Since it was founded in 2009, the Brand Cellar has bought 10 mostly forgotten British brands, seven of which are more than 100 years old. In June, the company opened an office in Hong Kong, where its chief executive is now based.
"In Asian markets, what were finding is that there's a real respect for the gravitas and depth of a brand because everything else here is vibrant and brash and new and exciting, and that's great but it means there's a premium on history and authenticity if you can make it relevant," said Andrew Harrison, the company's global brand director.
Harrison said the company is in talks with distributors in Hong Kong and India and hopes to launch two to three of the brands in Asia by the end of the year. Companies in its stable include a Scotch whisky maker, a British butcher and Conway Stewart, a bespoke fountain pen maker founded in 1905 whose writing instruments were used by Winston Churchill.
The company's experts have come up with a brand new marketing theme for the pens, including a new logo consisting of the company's initials, with a C flowing into an S laid on its side so that it looks like a figure 8 — an auspicious number in Chinese culture because the number rhymes with the word for prosperity.
Source: Associated Press
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