U.S. designers lag European labels in wooing China
By Michelle Nichols
NEW YORK (Reuters) - China is in fashion for top U.S. designers as they look to tap the world's fastest-growing luxury goods market amid a slow economic recovery at home, but critics say they have lagged their European rivals in seeing the Asian giant's potential.
Among Chinese consumers the top five brands for the past two years were all European -- Louis Vuitton, Chanel, Gucci, Dior and Armani -- according to Bain and Co, which estimates China's luxury good sales grew by up to 30 percent in 2011.
"American designers are slow to recognize the Asian market because they have such a big home market," said David Wolfe, creative director of trend forecasting firm The Doneger Group. He was speaking ahead of New York Fashion Week, which started on Thursday.
But that home market has struggled with economic uncertainty and while the U.S. luxury goods market -- still the largest in the world ahead of Japan and China -- improved last year, Bain and Co predicts it grew at about a third of China's rate.
"Given the world economy and the way things are trending and the opportunities over there, it would be foolish for an American designer to ignore the Chinese market," said James Mischka, one half of design duo Badgley Mischka.
"It's an established market that we're ... trying to crack," he said. Badgley Mischka plans to greatly expand in China in the next five years by opening dozens of stores.
China will account for 20 percent of the global luxury market by 2015, with spending in the country nearly tripling to $27 billion by that year from around $10 billion in 2009, according to consulting firm McKinsey & Co.
"A lot of American brands are coming in later, a lot of American brands are not in China yet," said Veronica Chou, president of Iconix China, which has so far brought seven of its U.S. brands, including Badgley Mischka, to China. Continued...