Land of Gore-tex welcomes more glam
Traffic from Asia makes Vancouver a great spot for luxury brands to develop
There was nary a luxury brand in Lotusland when Daniel Feuermann opened a tiny 450 square-foot Cartier boutique in downtown Vancouver's Pacific Centre mall more than 20 years ago.
Now, he has just moved his French jewelry and expensive watches out of a dim, clubby space with dark green carpets into a 2,000-square-foot location that is 65-per-cent larger, resplendent with blond wood floors, chandeliers and lofty windows.
Celebrations there come after Hermes doubled its Vancouver floor space with a 2,500-square-foot location last May and Tiffany & Co. unveiled a 4,700-square-foot store in November. And they come just before Holt Renfrew makes the grandest of these expansions into a 135,000-square-foot space this spring.
Indeed, this land of fleece and Gore-tex is welcoming more glam for all the usual reasons, according to retail analysts. The economy is booming. There is more disposable income. People are "trading down to trade up," that is scrimping on commodity items so they can splash out on luxury ones.
But the change, in part, also rides the coattails of a very specific buying group: Asian consumers, both here and from abroad, and those who travel back and forth.
"There is no question that a lot of Asian consumers have an affinity for luxury brands. We see that same thing in other groups too . . . [but] the magnitude of the percentage of people in Vancouver that are Asian is having an impact," said Gary Balaski, the Vancouver manager of Holt Renfrew.
"They have an elevated consciousness of luxury brands whether they are living here or travelling from Asia. It is critical that we carry them."
Asian cities such as Hong Kong, Tokyo, Seoul and Singapore have long been vibrant hubs of luxury shopping with statistics -- from number of per capita stores to size of stores to return sales -- that are unparalleled.
Companies have been smacking lips at a slew of projections about how a similar penchant for luxury might play out in China.
Traffic from these markets, whether via immigration or tourism, is making Vancouver an important spot for luxury brands to develop.
"There is great interest in Vancouver as a gateway to other important markets," said Andrea Hopson, vice-president, Tiffany & Co. Canada. "It clearly makes sense as a link to our other global locations."
On its own, Vancouver's market of two million people is "small by American standards; it is microscopic by global standards," said local retail consultant David Gray. But "this is a hub, a gateway for some pretty affluent spenders. Even if they don't purchase here, a store is a big billboard."
More prominent locations and expanded floor space mean a wider selection of luxury products can be shown off in Vancouver.
Previously, for example, Cartier here carried mostly jewelry and watches. Now, it has space to add handbags, silk scarves, and even elegantly embossed stationary to the mix.
None of the companies cares to reveal any tracking of the ethnic backgrounds of consumers and their purchases, but Balaski of Holt Renfrew did say: "Certainly, if you walk around our Vancouver store on any given day, you will see that we have many Asian clients."
Most companies also shy away from talking about how a presence in Vancouver might complement efforts in the bigger market of Asia. Coach, which plans to open 10 new stores in China this year, for example, elegantly sidestepped such queries in a prepared statement: "Our accessible luxury proposition has resonated well with both domestic customers and the Asian traveller."
Despite this, observers say they are taking keen note.
"Luxury brands are very conscious of the increasing importance of Asian luxury consumers worldwide and they are making a lot of effort in welcoming them in their stores everywhere," said Michel Phan, who researches luxury brands in Asia at the ESSEC Business School in Paris. "Nowadays, it is very common to find salespersons in luxury stores in Paris or London who can speak Mandarin and Japanese fluently."
Consumers from mainland China are of particular interest these days. Although luxury brands are sinking millions of dollars to develop the market there, Chinese consumers actually prefer to buy luxury goods abroad because prices are usually much lower than what they would find at home, according to Phan.
Steep import duties and value added taxes mean luxury goods companies can charge as much as 35 per cent more for their goods in China compared to other markets.
"When consumers from mainland China or other new markets discover brands, they like to travel and like to buy those brands in other places they visit," said Feuermann of Cartier.
'When consumers from mainland China or other new markets discover brands, they like to travel and like to buy those brands in other places they visit,' Daniel Feuermann says.
Photograph by : Ian Lindsay, Vancouver Sun