Jason Denmark, Bosideng UK's director of retail operations, says the company is looking to establish a premium product line. Zhang Chunyan / China Daily

Chinese clothing retailer Bosideng banks on London flagship store to move up the value chain

The glitzy central London shopping district, home to some of the biggest names in high-end luxury, will have a new addition to its ranks in July. Joining the ranks of several leading European and US luxury brands is the flagship store of Chinese retailer Bosideng International Holdings Ltd, which hopes to connect with high-end customers with its exclusive one-of-a-kind premium clothing range.

The Bosideng outlet is in South Molton Street, off Oxford Street, a popular shopping destination for high-end customers. "Our range of menswear products will not be cheap. They will be priced more in line with other luxury brands like Hugo Boss," says Jason Denmark, director of retail operations, Bosideng UK.

Justifying the higher price tag for his products, Denmark says most of the products in the London store are manufactured in Europe, using raw material from 15 different suppliers in Italy, Turkey and Portugal.

But challenging its bigger rivals may prove not that easy, considering that Bosideng is pitted against formidable British rivals such as Alexander McQueen and Vivienne Westwood in London. The company also has to factor in higher establishment costs of 20.05 million pounds ($31.51 million, 24.92 million euros) and 8 million pounds for refurbishing expenses.

Denmark, however, feels that such huge investments are necessary, as the company is looking to establish a premium product line that is different from the mass market image it enjoys in China.

"We realized that in order to make a mark in the UK we had to come up with something different, as our existing products were not suited for British consumers," says Wayne Zhu, chief executive of Bosideng UK.

Set up by Gao Dekang in the eastern coastal province of Jiangsu in the late 1970s, Bosideng owed much of its initial growth to cheap labor and land costs and the growing population of affluent middle-class consumers in China.

Several years of strong growth was followed by a successful listing of the company on the Hong Kong Stock Exchange in 2007. This was followed by an ambitious expansion plan that saw the company setting up outlets in several global locations, including Russia and the United States.

But rising labor and raw material costs soon forced the company to adopt a different strategy to sustain growth. The company realized it had to move up the value chain and invest heavily in a new and diverse range of high-end products.

At the same time, it was also important for the company to carve a niche in the fashion hot spot of London before expanding into other locations.

The South Molton Street flagship store will feature about 450 pieces of clothing. Only 7 percent of the products are manufactured in Bosideng's Chinese outlets and they are quite different from those available in China, Denmark says.

"We've created that twist of inventiveness," Denmark says, as he points to a red down coat, recognizable as Bosideng at first glance, but distinctive for having added shoulder pieces and elbow pads in tweed - a popular material in British fashion.

He says that the tweed fabric is sourced in Europe, shipped to China, stitched onto the coat, then shipped back to the London store.

To make its range popular with high-end customers, Bosideng has also roped in well-known designers, such as Nick Holland and Ash Gangotra, who have previously worked with Oasis frontman Liam Gallagher and his label Pretty Green.

Though the design and fabric quality of Bosideng are not that different from Paul Smith, a leading British brand, Denmark says his company lacks the rich brand history that Paul Smith has in London.

"But we believe that it is also an advantage as it will be far more easier for the British customers to accept our Chinese heritage.

"What we will achieve is to dovetail a subtle combination of Chinese and UK fashion-influenced design, using mainly European fabrics and manufacturing processes, to create this unique collection. It's a match made in heaven," Denmark says.

Taking the principal Chinese color red as an example, he says, such fusion could include adding a red lining to navy peacoats and classic double-breasted flannel suits, adding a red tag to cashmere jackets, adding red beading to a shirt or red stitching on the edges of a dark-colored jacket.

"It's not something we want to over-promote, it's a subtlety," Denmark explains, adding that such details will catch the eye of Bosideng's target audience - the forward thinking, inspirational young man who defines himself through fashion. "This person will understand cloth, he'll understand stitching details, he'll understand the lining of the products and he wants to make sure he's an exclusive customer."

Bosideng's key collection will have only 24 or 50 pieces at a time, so as to constantly create a feeling of newness in its store. "We want to ensure the range is fresh, and new products will arrive on a week-to-week basis."

To promote its brand image of "freedom" - derived from its dove-wing logo, Bosideng has a set of promotional images focusing on birds, such as the eagle, owl and dove.

For example, the advertisement to appear on the front display window on South Molton Street will feature an eagle spreading its wings while perching on the arm of a man who wears a three-piece suit by Bosideng. The image's background features a range of mountains in the Huangshan, a mountain range in Anhui province, in East China.

"A bird has the freedom to explore and witness the world. Similarly as a team, we have developed those initiatives based on the very same principals - freedom of expression, freedom of thought, freedom to innovate and create," Denmark says.

Not only that, the bird motif also symbolizes the potential that Bosideng can unleash as a young brand and as the first Chinese premium brand in London.

To achieve cost-efficient promotion during the London Olympics when advertising rates are inflated, Bosideng will be launching an online lucky draw in the weeks leading up to the store's opening to "get people talking about it".

Daily winners of the draw will receive a gift, but all participants will be offered a preview of Bosideng's launch collection on the brand's Facebook page, as well as behind-the-scenes footage of the launch campaign photo shoot, the highlight of which is how the stubborn live eagle was taught to cooperate.

Zhu says that if Bosideng's model in London proves successful, the company will replicate it in other Western countries. Although Bosideng's products currently sell in the US, Canada and Russia, Zhu says that from his previous experience he has learnt that selling products in US department stores gives Bosideng limited branding freedom.

"Our sales channels are controlled by such an approach. It is hard to break into these department stores, and even harder to get good display positions. Usually our products are given 30 percent less mark-up than established brands, although their quality is superior," Zhu says.

But for now, Bosideng hopes to make its premium product line more accessible globally through e-commerce, with a dedicated website likely to be launched before Christmas.

In one respect, Bosideng's move is counter-intuitive, because foreign retailers, including Tiffany, Wal-Mart and Coach, are entering China and looking to tap into the country's double-digit growth in consumer spending.

But Zhu and Denmark believe London is the place to build the premium brand that Bosideng wants to be. The successful range can also be shipped back to China to tap into the country's demand for luxury.

As well as the premium fabric and design, they feel that Bosideng's location is also a key asset.

The building is 20 meters away from the Bond Street exit of the London Underground with an annual traffic flow of 24 million, according to a Forbes magazine article last year.

The company is also looking to connect with millions of tourists flocking to London for the Olympics.

"Visitors from China already have a perception of the Bosideng brand. But right from the interiors to the range of collections, the London experience will be a totally different experience for them," Denmark says.

Contact the writers at cecily.liu@chinadaily.com.cn and zhangchunyan@chinadaily.com.cn

(China Daily 06/29/2012 page20)