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Retail Shake-Up: Hugo Boss, Marc Jacobs and...Bosideng?

With a seemingly never-ending debt crisis which has prompted a slowdown in consumer spending, investing in Europe might not appear particularly attractive right now. But Bosideng, a Chinese fashion brand specializing in down-filled clothing, thinks differently.

The company will open a brand new flagship store near Bond street, London’s posh shopping district, on Thursday, just in time to catch a wave of Olympic tourists.

The launch signals a change in China’s clothing retail market. While international retail players like H&M, Uniqlo and Zara are looking to further explore the Chinese mainland, China’s retail powerhouses are starting to look across the border to regions beyond Asia.

Bosideng is the first large mainland Chinese fashion group to embark on an overseas mission, and it is not holding back. The launch in London’s prestigious West End cost approximately 35 million pounds ($54 million), the company told CNBC.com.

Chinese athletic apparel and footwear brand Li-Ning made an attempt to launch its brand in the West with a retail store in Portland in the U.S. in 2010, but the store recently closed after Chinese media outlets reported in early February that Li-Ning would cut staff to reduce costs after forecasting a 6 to 7 percent drop in annual sales.

Bosideng has been the number one down clothing brand in China based on sales volume for the past 16 years and has 11,000 shops on the mainland, but despite the firm’s success in China, it has turned its concept upside down for the UK store.

Rather than exporting its Chinese success formula and holding on to its expertise of being a mid-market maker of warm jackets, the UK version of the brand hopes to go more upmarket and will aim to compete with brands like Hugo Boss and Marc Jacobs.

Bosideng’s collection isn’t very Chinese either with fewer than 10 percent of the UK men’s gear manufactured in China, and parts of its collection manufactured in Italy.

Bosideng wants to gives its items an “East meets West touch,” and “merge EU fashion with Chinese fashion,” Bosideng’s UK CEO Wayne Zhu told CNBC.com.

Their UK logo has been adjusted as well to make the eagle in the Bosideng logo more prominent. “The eagle is used to depict freedom of expression, a theme Bosideng wishes to bring to the UK,” Zhu said.

Bosideng’s UK store fits right into the high street landscape and doesn’t come across as Chinese at first sight, but looking more closely at the store’s interior design you’ll find the Chinese influence is to be found in the whole store.

British artist Richard Sweeney designed a paper sculpture in the form of the Bosideng eagle, which hangs behind the checkout of the store; the exterior of the store is red, the color of good luck and happiness in China; and the walls inside the store are covered in patterns depicting mountain landscapes in China.

Because Bosideng thinks the men’s fashion clothing market is currently too “sterile”, exporting an upmarket version of the brand is a “gap in the market”, Jason Denmark, Director of Retail Operations at Bosideng UK, told CNBC.

The Asian fashion giant, which was listed on the Hong Kong Stock Exchange in 2007, aims to be accepted as a stylish brand by western consumers and distinguish itself from European rivals Hugo Boss, Paul Smith and Zegna by selling most of its menswear at slightly lower prices, and by trading on exclusivity by making only 50 pieces of each item.

Opening in London hasn’t been quick or easy. The store took two years of planning and development, turning a previous 3-storey building that housed the Hog in the Pound pub into a 6-storey shop, offices and apartments, and get it done in time for the Olympics.

Bosideng’s UK launch is seen as a test: if successful, other mainland Chinese retail powerhouses will follow. “We’re creating the platform for other Chinese retailers,” Denmark said.

The fashion retailer is not worried about the UK’s deepening recession and the euro zone’s economic slowdown. Bosideng assumes its wealthy target market is not feeling the crisis to the same extent.

Will Bosideng be able to establish the brand in London? The firm is taking a big gamble. Although Europe’s economic power may be crumbling, the "old world" continues to lead the fashion market, with labels such as UK’s Burberry, Italy’s Prada en France’s Louis Vuittonleading international fashion trends.

Contact Europe: Economy

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