French luxury handbag maker Longchamp is eyeing a huge expansion in China despite the country’s economic slowdown, its chief executive said as the firm opened a new store in Hong Kong Wednesday.
The 64-year-old family-owned brand, famous for its coloured fold-up nylon and leather totes, said it was optimistic about the Asian market, especially China, as European economies — its main markets — remain “unfavourable”.
“We have no intentions to slow down our expansion plans, especially in Asia,” chief executive Jean Cassegrain, a grandson of the founder, told AFP.
He said he had no concerns about China, adding: “The purchasing power of Chinese consumers continue to increase and it is not going to change” even as the Asian powerhouse’s economy slowed.
The 400-square-metre (4,300-square-feet) outlet is Longchamp’s second mega store in Hong Kong and is located in Kowloon, one of the city’s busiest shopping districts where mainland Chinese tourists flock to splurge on luxury goods.
Cassegrain said Longchamp is looking to expand its current presence of seven stores in mainland China — including Beijing and Shanghai — to about 40 to 50 stores, although he could not specify a timeline.
“The challenge is to pick the right locations,” he said, adding that Longchamp has appointed popular Chinese actress Gao Yuanyuan as its ambassador to boost the brand’s profile in the region.
China’s economy expanded 7.6 percent in the second quarter of this year, its worst performance in three years, and disappointing data since then has led to fears that third-quarter growth may have weakened further.
Third-quarter data is due out on Thursday.
Longchamp saw turnover of 390 million euros ($507 million) last year, up 22 percent from a year earlier.
China is set to become the world’s second biggest market for luxury goods after the United States by 2017, overtaking France, Britain, Italy and Japan, consumer research group Euromonitor said in a report this month.
Luxury-good sales could top $302 billion worldwide this year, up 4.0 percent from 2011, driven by demand in emerging economies, according to the report.