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PPR joins luxury sector rivals on China gold rush trail

12 december 2012, 11:48
0
PPR, the French retailer that has snapped up Hong Kong jeweller Qeelin, intends to leverage the brand to build its presence in China and across Asia in a path already trodden by up-market rivals such as Richemont and Hermes, AFP reports.

The group, headed up by Francois-Henri Pinault, acquired its first Asian brand at the weekened, when it paid an undisclosed sum for a majority stake in the jeweller that was launched in 2004 by designer Dennis Chan and Frenchman Guillaume Brochard.

PPR, whose European brands include Gucci, Yves Saint Laurent, Stella McCartney and Alexander McQueen, is following in the footsteps of Richemont, which has owned the Shanghai Tang label since 1998, and Hermes, which launched Shang Xia (jewellery, furniture) in Shanghai in 2010.

"Qeelin is a small brand but with a big growth potential, especially in China," PPR's director general, Alexis Babeau, told reporters in a telephone conference.

PPR wanted to extend its presence in the jewellery sector and Qeelin fit the bill for three reasons.

Its strength in the range between 2,000 and 30,000 euros ($2,600-38,800) per item with an average sale at 4,000 euros positions Qeelin as a good fit with Boucheron, PPR's existing -- but even more up-market -- jewellery business.

With its roots in Hong Kong, Queelin is seen as having "Chinese DNA" that will make it easier to grow the brand on the mainland.

Finally, the scale of the initial investment is likely to be relatively small with the company only having 50 employees and 14 shops, including one in Paris.

PPR is hoping it will be able to repeat the success it has had with handbags-led brand Bottega Veneta and fashion line Alexander McQueen, which have seen sales rise 11- and 12-fold respectively since being taken over by the retailer, according to Babeau.

Qeelin's designs have frequently been inspired by Chinese symbols and support from stars like Kate Winslet and Katy Perry have bolstered sales.

"Qeelin is interesting because it has been able to create its own identity in China but you have to keep things in perspective. It is only a small operation for PPR," said Francois Arpels, managing director of investment bank Bryan, Garnier and Co..

PPR reported sales of 12.2 billion euros in the luxury and sport-lifestyle sectors last year. Qeelin's turnover was around 30 million.

Qeelin's shops are spread between mainland China, where there are seven, Hong Kong (four), London (two) and the one in Paris.

The line is also distributed through concessions in upscale department stores, include Restir in Tokyo.

Chan and Brochard will continue to run the business and retain stakes in it, according to PPR.

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