Polo Ralph Lauren takes back retail outlet

• Source: Global Times
• [10:46 May 24 2010]
• Comments

Shanghai Jin Jiang Dickson Center, an upscale shopping center located on Changle Road in Luwan district. Photo: Cai Xianmin

By Tang Zhao

Polo Ralph Lauren is to become the latest international company to take back control of a retail outlet on the Chinese mainland from its local partner in order to maintain brand coherency and boost sales.

The manager of the Polo Ralph Lauren store at the Shanghai Jin Jiang Dickson Center in Luwan district said that the store will be handed back to Polo Ralph Lauren by Dickson Concepts (International), a fashion brand distributor headquartered in Hong Kong that manages the distribution of several international brands across Asia, on July 1, the China Business Journal reported Saturday.

The move echoes Polo Ralph Lauren's payment of $18.2 million to Dickson Concepts when it took back control of its Euro-pean and Japanese operations some years ago, according to the 2009 annual financial report of Dickson Concepts.

The Tommy Hilfiger Group announced on March 31 that it will be assuming direct control of its wholesale and retail distribution on the Chinese mainland from Dickson Concepts on March 1, 2011.

"This acquisition is in line with our strategy to consolidate brand management and approach the market in the most coordinated manner possible," said Fred Gehring, chief executive officer of the Tommy Hilfiger Group, in a press release.

"By assuming direct control of the brand operations in China, we will now be in a better position to support the development and expansion of the business in this important growth market," he said.

Fast Retailing, holder of the Japanese fashion brand Uniqlo, has maintained direct control of its retail network on the Chinese mainland since it entered the market in 2001. H&M, which arrived on the Chinese mainland in 2007, also follows the same strategy.

Zhang Qun, public relations officer for Uniqlo, told the Global Times that, in order to standardize management and unify its brand image, all stores are controlled by the company directly.

But some brands still prefer to let distributors sell their products on the Chinese mainland on their behalf. "Such brands believe the Chinese market is very complicated, so they feel they should try to benefit from local distributors' knowledge and experience," an unnamed fashion magazine editor was quoted as saying in the China Business Journal.