Hermes to expand Chinese brand

Shanghai, Sept 16, 2011 (AFP) - Shang Xia, the brand Hermes launched a year ago in Shanghai, will open outlets in Paris and Beijing after sales beat expectations, the head of the French fashion label Patrick Thomas said.

Shang Xia

Industry experts are closely watching the new brand to see what lessons it can offer to other high-end foreign labels looking to tap into China, where a rising number of wealthy people are snapping up luxury goods.

Thomas said that while the brand -- launched specifically for the Chinese market -- had yet to make a profit, results were "largely above expectations," but did not give any specific figures.

"A second shop and a third shop should open in Paris and Beijing, probably next September," Thomas told reporters in Shanghai on Thursday.

Shang Xia, or "Up Down" in Mandarin, offers jewellery, clothes, homeware and furniture, and is headed by creative director Jiang Qionger, a Shanghai-based designer who is also a minority shareholder in the new company.

"The Chinese (luxury) market is evolving extremely rapidly and there is more and more demand for top quality," said Thomas.

"China is very open to new projects and to creativity, and for us that's the most outstanding trend in this market."

The Asian nation has proved a huge boon for Hermes, which is expecting a 40 percent rise in revenue this year, according to Thomas.

The brokerage firm CLSA Asia-Pacific Markets predicted in January that China would become the world's largest luxury goods market by 2020, accounting for 44 percent of worldwide sales and bigger than the entire global market is now.

This market "has huge potential for growth... which will stay above 25 percent in the coming years," Thomas said.