Novomania; European labels explore the Chinese market

“Novomania is the Chinese Bread & Butter” says Olivier Petragallo from Replay. According to him, the trade show Novomania in Shanghai could become China's leading fashion event. Much in the same way that Berlin's Bread & Butter has in

Northern Europe. Guilherme Faria, Novomania's Portuguese General Manager, isn't convinced by this comparison. “Fashion trade shows in China and Europe have nothing in common, here its about concepts, retail concepts, not products.”

Fashion trade show Novomania, held in Shanghai for the third time at the beginning of March, is a platform for labels looking for opportunities to expand into China. Yet it is a mistake to think that expansion can be found through wholesale customers. Independent multi-brand retail is non-existent or scarce. Shopping centres are filled with brand stores. The fashion labels at Novomania are looking for Chinese partners willing to invest in new stores. The Chinese Real Estate companies that are behind the shiny, new shopping centres determine the franchises. Multi-branding as a shop concept, where brands reinforce each other, is not valued by everyone. “We don't need it,” says Nobuyuki Nanamiya, the Japanese distributor and licensee of the British label Katharine Hamnett, “the brand is already quite well known here.”

“The Chinese retail market is growing,” says James Macdonald, from Savills' Real Estate Service, “the rate of growth is slowing but each month still sees the arrival of new brand stores. The luxury brands came first and now it's the turn of the fast-fashion chains like H&M, Uniqlo and C&A.” Macdonald warns of the prevailing inflation which threatens consumer confidence. “A colleague of mine has stopped eating apples because they have become too expensive.” He partly attributes the country's sales growth in fashion and luxury goods to the increased prices. The Chinese government has recently taken measures to curb inflation but also to restrain the unbridled growth. Other obstacles? “Finding suitable locations and the increasing rents. It is however still an interesting market for Western companies,” says Macdonald, “In part due to its enormity and the government's support of consumption and it is still the fastest growing market”.

Macdonald spoke during a Real Estate seminar held on the Novomania show floor. The fashion fair was established in 2010 by Novo Retail, distributor of the Replay, Miss Sixty and LeSportSac brands. “Novomania was created to bring local distributors and project developers into contact with each other,” states Faria. “It later proved to be an ideal platform for foreign brands as well.” According to Faria, perseverance is required to make it in China. “Just because a brand is well known in Europe doesn't automatically mean it's known here. Companies need both the know-how and the financial capacity to become known in China.”

David Dalmau, director of the Spanish Custo Barcelona, is in Shanghai to look into its potential. “We may be a big name in Europe but no-one knows us here.” Custo Barcelona has a large stand at Novomania and Dalmau confirmed that the label had been approached by various franchise partners. “We are still trying to figure out how it all works. Who we will work with, how we divide the costs?”

American Vintage would also like to expand into China. Marketing Manager, Jeanne Marin stated that the French label is opening two stores in Hong Kong this spring, but as yet doesn't have a partner on the Chinese mainland. Semih Simsek, founder of Liebeskind Berlin, said that he had spoken with three potential partner companies during Novomania. “We have received very positive reactions.”

Although the Chinese retail market is dominated by mono-brands, multi-brand retail is not unthinkable in the future. “Novomania opens up new opportunities,” says show manager Faria, “it is still a little premature for multi-brand retail in China, but it will grow faster than you can imagine.” SMC Brands sets a good example. SMC stands for Scandinavian Multi Brand China and presented several labels on their stand such as: Rules by Mary, Swedish Hasbeens and its founder Pelle Aldestam's label: Denim is Dead. “We are convinced that Scandinavia brands will reinforce each other on the shop floor and are looking for a partner who wants to sell our brands together.” Johan Graffner from the Swedish accessories label Cheapo: “It is usually the multi-brand retailers that build brands, but in China it's the opposite. Multi-branding is new here but I think that it will be the next step.”

From our correspondent