Paul Smith will return to China later this year as it plans to open 24 stores in the next five years in its second attempt to crack the country.
The fashion brand will open the first store in September in Tianjin in a franchisepartnership, the Financial Times said. Paul Smith will team up with ImagineX, which is the sister company to the Lane Crawford department store located in Hong Kong that specialises in introducing Western brands to China.
A 5,000 sq ft flagship Paul Smith store is also tabled to open in Shanghai.
Paul Smith pulled out of China in 2007 due to undisclosed losses. In 2008, founder Sir Paul Smith had said the Chinese market was “extremely dangerous” as a result of very high rents and the majority of the population only wanted “clothes to cover their bodies”.
ImagineX executive director Alice Wong said the Chinese market today is bigger and more mature than it was in 2007.
In the years since Paul Smith’s departure many Western brands have launched in China with luxury brands faring particularly well due to demand, the lack of local competition and a sharp increase in disposable income.
Paul Smith already has a large Asian presence with stores in Hong Kong, Singapore, Taiwan and the Philippines, Korea and Japan.
Tristan Rogers, chief executive of international expansion software specialist ConcretePlatform, said: “To hear of a brand that has previously had its fingers burnt in China deciding to re-enter, is perhaps testimony to the rapid change in consumer culture in the East, but perhaps also a firm indictment that the Western markets offer no shareholder value at present.
“So, perhaps it’s better to take a risk in the East than face certain failure in the West. As Warren Buffett stated, ‘Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.’ Whatever the reason, Paul Smith should be commended for being decisive when many would perhaps do nothing.”