Luxury retailer: China graft crackdown won't hurt us

Lane Crawford: Unfazed by China's anti-graft drive
Lane Crawford: Unfazed by China's anti-graft drive

Luxury retailer Lane Crawford says it's not fazed by a graft crackdown by Chinese authorities that has hurt rivals such as Prada, and will continue its expansion plans in mainland China.

China's anti-corruption efforts delivered a blow to luxury brands last year. For instance, Beijing banned advertising that encourages giving luxury gifts, a custom which has been popular in China.

The president of Lane Crawford, a high-end Hong Kong retailer, told CNBC on Friday that he was not too worried about the impact of the crackdown. This week the firm opened its fourth China-based store in Chengdu, a big city in the country's west.

"We are fundamentally different [from other luxury brands]. We are unique because we are not at all a hard luxury business we are very much about fashion," said Andrew Keith.

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"So the customers that come into Lane Crawford are buying for themselves. It's not about gifting, it's about self-gifting," he added.

Luxury brands, from high quality liquor to watch makers and handbag retailers have suffered as a result of the clamp down on graft.

This week luxury Italian handbag maker Prada lowered its global sales forecasts for the financial year through to January 2015, and said sales would rise at a low single digit pace, slower than last year's 7 percent increase.

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Keith said Lane Crawford still saw China as very much a long-term growth strategy for the company. In addition to the Chengdu store, the fashion retailer has one store in Shanghai, China's financial center, and two stores in the capital, Beijing.

He added that the firm aimed to target Chinese consumers online, rather than by opening a number of physical stores.

"We are really looking at China as a combination of strategically positioned hubs, and then being able to use our online business to reach the rest of the consumers in China," he added.

Atmosphere during the open day for media at Lane Crawford flagship store on October 9, 2013 in Shanghai, China.
ChinaFotoPress | Getty Images

Representing 35 percent of Lane Crawford's business, Keith said menswear was a strong focus for the company that was founded in 1850 by Scottish merchants in Hong Kong.

"We see the China market, particularly with younger, fashionable men, who are having just as much fun with fashion and lifestyle as their girlfriends and wives, as a big growth opportunity for us," he added.

"Customers are looking for brands that are not widely available, something that's different," he added.

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Lane Crawford recently began offering a same-day delivery service for online customers in Hong Kong, Shanghai, Chengdu and Beijing in an effort to improve its service. Next day delivery still applies for the rest of China.

Its department stores offer 800 different fashion brands.