HONG KONG — “I think China has huge potential. There is almost no downside to the future of retail there,” asserts Adrienne Ma, president of Joyce Boutique Holdings.
Ma has been watching her competitors closely and assessing which ones might have entered the mainland Chinese market too early, which ones are serious and what the keys to success might be.
Joyce will open a new concept store in Shanghai in February 2007 and has its eyes on opening in Beijing and Chengdu. “For what Joyce is, we need to be in Shanghai,” said Ma. “Chengdu is the most active and shopper-lucrative city in the second-tier market, and we’re looking at Beijing. The rest of the country is not that ready for Joyce, plus we still want to learn about the market.”
Joyce Boutique, which was founded 30 years ago by Ma’s mother, Joyce Ma, is credited with introducing designer fashion to Hong Kong, including bringing Giorgio Armani and other major Italian labels to the region. The retailer sells more than 230 key brands in its stores, which include multibrand Joyce boutiques and freestanding single-label stores. Currently, the Joyce lineup includes Yohji Yamamoto, Stella McCartney, Zac Posen, John Galliano, Jil Sander, Pucci, Dries van Noten, Comme des Garçons and Hugo Boss.
This is not the first time Joyce has eyed expansion into China, but it does represent the company’s only serious foray into international waters since the heyday of the mid-Nineties. To Ma, it appears that unexpected roadblocks keep popping up. Besides SARS, which devastated local economies in 2003, there was the regional economic crisis of 1997-1998 and the terrorist attacks of 9/11. “It seems every year there’s a major event,” she said.
“When we were just about to go [into China], SARS happened,” added Ma, remembering the health crisis. “We were lucky, in a way, to avoid that hurdle.”
Still, SARS is not the event that had the most impact on the company’s agenda. “During the Asian economic crisis, we were at the height of Asian expansion. We were in Taiwan, in the Philippines. We were thinking of a multibrand store in Seoul, Korea. We were ready to open Bangkok Joyce, in a 20,000-square-feet space. And that city collapsed overnight. Nobody knew how bad Hong Kong could get.”
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Like many around her, Ma pulled up stakes and started concentrating on paying down the company’s debt, which reached some $200 million. “We got it down to $70 million to $80 million in one and a half years,” she said.
To do so, Ma reduced staff, moved the company’s headquarters to one of the city’s industrial neighborhoods and ordered buyers and every other member of staff to recalculate all purchases. The plan seems to be working. Besides reducing debt, Ma said the refurbished Joyce flagship in Hong Kong is enjoying double-digit growth.
“We’re adding another 10,000 square feet,” said Ma of the store, which will soon have a second floor and its own elevator. The company has also opened four freestanding boutiques in the Tsimshatsui area of Kowloon for Marni, Etro, Anna Sui and Jil Sander stores. All have opened within the last three months. “We believe there’s a Kowloon market for these brands,” said Ma, pointing out that residents of Hong Kong island rarely shop in Kowloon or vice versa. “It’s two separate markets.”
Such new shops in Hong Kong, coupled with careful steps into China, represent the way forward for Joyce. Said Ma, “We are in Taiwan, but we are scaling it down to focus more on Hong Kong and China. Nowadays, one has to be able to react quickly. We don’t want to extend ourselves too far. China is our long-term market. This is just our first phase. In five or 10 years, China will change tremendously, and we will try to keep up with the pace.”