Managing Asia

Managing Asia

US luxury label Tory Burch undeterred by HK protests

Tory Burch: Expand in China slowly, strategically

Pro-democracy protests put a huge dent on Hong Kong's lucrative luxury space, but American fashion designer Tory Burch remains optimistic and plans to expand in the ex-British colony.

"I'm optimistic that it'll blow over. It definitely affected sales for the first couple of weeks, but thankfully we are performing well now. We are hoping to open our flagship there one day," the 48-year-old founder of her eponymous label told CNBC's "Managing Asia."

The accessible luxury brand known for its eclectic designs currently has five retail stores in Hong Kong, which saw its largest street demonstrations in September since returning to Chinese rule in 1997. Protesters, mainly students, are against Beijing's decision to screen all nominees running for the city's chief executive role in 2017.

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Burch is also unconcerned by slowing economic growth in China and an anti-corruption campaign that has reined in conspicuous spending among wealthy mainlanders.

"I think the macroeconomic environment is tough all around. Not just China [but] Europe as well. I think we still have a lot of opportunities ahead of us," she said.

U.S. Designer Tory Burch.
Alberto E. Rodriguez | WireImage | Getty Images

Slow and steady

For years, China has been the fast-growing market eyed by luxury retailers and Burch is no exception. However, while she launched 10 stores in the world's most coveted luxury space over the past three years, including the label's biggest ever outlet in Shanghai last month, the award-winning designer has avoided rushing like other high-end labels.

"We're taking our time. There's a big opportunity here, but that said, I'm happy we didn't expand too quickly. We don't look at competition as something that scares us... We are just doing what we love to do," said Burch, referring to fierce rivals in the affordable luxury sector like U.S.' Kate Spade and Michael Kors.

This probably explains her choice to locate her new venture in China opposite competitor Michael Kors. The 9,600 square feet retail space has an entire room dedicated solely to her 20-piece China-exclusive collection, a key in the battle for mainland luxury shoppers who favor niche items.

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The "slow and steady wins the race" attitude also applies to Burch's expansion plan in Asia. With more than one third of her boutiques worldwide located in the region, she hopes that Asia will eventually account for 30 percent of overall sales.

"Asia is a strong and important market for us. Eventually we could see it as 30 percent of our business... having [equal contributions] as the U.S. and Europe," she said. "[But] we are not in a rush... We want to do it strategically, slowly and carefully."

Future plans

Unlike her guiding principle, success didn't arrive slowly for the American who has been named as the second youngest self-made billionaire in U.S. history.

In less than a decade, Burch turned her fashion and accessories label from a small design studio in her New York City apartment into a fashion powerhouse worth over $3 billion. Propelled to fashion "must-have" stardom by television mogul Oprah WInfrey in 2005, the brand is expected to make over $1 billion in sales this year.

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Also named by Forbes as the 79th world's most powerful woman in 2014, the fashion mogul wants to provide loans and mentorship to female entrepreneurs, via the non-profit Tory Burch Foundation that she set up in 2009.

"When I was growing up, I never knew there would be a discrepancy [between] men and women. I grew up with three brothers, thinking that we could do everything equally. But when I got to the workforce it was different and I think that has to change," Burch told CNBC.

"During a start-up, women have a tough time getting loans and finding mentors. So for us it really was about facilitating that."