Hermes tests European appetite for its young Chinese brand

Wed Sep 11, 2013 1:48pm EDT
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By Astrid Wendlandt and Pascale Denis

PARIS (Reuters) - Shang Xia, a Chinese brand backed by French luxury goods group Hermes (HRMS.PA: Quote), opened its first shop outside its home market in Paris on Wednesday to test demand among non-Chinese customers for its handcrafted products.

Shang Xia, which aims to revive Chinese crafts that were nearly destroyed by China's Cultural Revolution, including ancient styles of porcelain, cashmere felt and furniture, is part of a new generation of Chinese brands elbowing their way into the crowed European luxury goods market.

The young brand is hoping its Paris showcase, just meters away from a Hermes boutique, will help lift its profile among European buyers, as well as the legions of Chinese tourists who visit the French capital each year.

"This morning I sold three pairs of shoes to Chinese tourists who discovered the brand," said Shang Xia's artistic director and chief executive Jiang Qiong Er, who owns 10 percent of the venture. Hermes controls the other 90 percent.

Last year, Chinese luxury shoe brand Stella Luna also opened its first European store in Paris's trendy Boulevard Saint-Germain.

Shang Xia is the brainchild of Patrick Thomas, the French brand's outgoing chief executive, who aimed to challenge the view that Chinese-made goods were synonymous with poor quality.

About 90 percent of Shang Xia products, which include a 4,000 euro ($5,300) porcelain tea service decorated with hand-weaved bamboo threads and 4,700 euro cashmere felt coat, are made in China.

Thomas, who has led Hermes since 2006, will remain as chairman of Shang Xia once he passes on the group reins to Hermes family member Axel Dumas, 43, in February next year.   Continued...

Furniture are displayed for sale in the shop of the young brand Shang Xia on its opening day in Paris September 11, 2013. REUTERS/Jacky Naegelen