BEIJING — MCM showcased a new collection outside of Europe for the first time on Friday night in Beijing, indicating just how important China has become for the accessories brand since it opened its first store in the country only four years ago.
MCM executives stressed that the showing of the brand’s spring collection was meant to be a global event intended not only to captivate its young, hip Mainland consumers, but also potential customers in Europe and the U.S., where MCM is trying to make aggressive market reentries.
Founded in the Seventies by Michael Cromer in Munich, MCM became known for its logo-driven accessories, but fell out of fashion in the Nineties. In 2005, Sung-joo Kim, one of Korea’s top businesswomen and head of Sungjoo Design & Tech, MCM’s license holder in the country, acquired the brand and has made it her mission to reinvigorate its image.
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Since then, MCM has become immensely popular in Korea, its number-one market, and China, which, representing 20 percent of global sales, is second. Its popularity largely stems from marketing campaigns utilizing Korean celebrities, who are hugely influential across Asia, and in particular China.
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While Kim’s initial focus was on Asia, the brand is turning its attention to the West. Earlier this year, it reopened its flagship in Munich. Paolo Fontanelli, MCM’s international chief executive officer, said the company will open a flagship in New York in December, followed by three or four stores in the U.S. in 2015. MCM, already available online in the U.S. via neimanmarcus.com, will soon be available in some of the retailer’s brick-and-mortar locations. The brand is also planning to launch its own e-commerce operations in America, its first market to operate online sales outside of Korea.
Additionally, the brand is creating a higher-end “Gold Line,” which is manufactured and designed in Italy as part of a strategy, according to Fontanelli, to reposition it to Western consumers as a top-tier luxury label. MCM just inked its first licensing deal with a European eyewear manufacturer to produce a sunglass and eyeglass line and there are plans to introduce watches and cosmetic products.
“We are trying to grow our demographic and give more visibility of MCM into different channels of distribution,” Fontanelli said. “It will be a growth opportunity for MCM to be seen in other channels of distribution with respect to what we have today.”
Yet a key challenge for MCM is whether the brand will be able to leverage its popularity in Asia to grow in the West. Fontanelli acknowledged that work needs to be done to remind consumers in Asia that it is not from Korea.
“This is still something we will have to work on,” the executive said. “MCM in China is first of all clearly perceived as a luxury brand, which is what we want. But there is still room for clarifying to the final consumer that we are not a Korean brand.”
This work will potentially extend to the West, where MCM has to reintroduce itself to consumers who may neither be familiar with the brand nor with Korean pop culture.
“Today, we are in a different stage of the development of the brand. We want to be more international. This is different from the path other brands have been doing. Usually they are successful in Europe and America, and then try to bring that success to Asia,” he said. “We are the first brand being very successful in Asia trying to go back to its roots in Europe and in the U.S.”
Fontanelli said in addition to increasing distribution channels and diversifying product lines, local celebrities in Europe and America would be used for marketing purposes.
Still, at least for the time being, it appears Asia will remain the primary focus. At Friday night’s event, held at the Phoenix International Media Center, a giant bowl-like structure encased with a web of silver steel in central Beijing, all celebrities were regional, with more of an emphasis on Chinese stars as opposed to Korean ones.
“Beijing has become an important capital of fashion,” Fontanelli said. “We are strong here, and we think we want to make an important statement here where we feel we have a dominant position in the market. This is the right environment to make a statement and to bring the brand to the next level.”
Fontanelli said by the end of this year, the company will have 45 stores in greater China. In 2015, expansion will slow in the country, mainly because it is becoming harder to find top-tier retail locations, he said. Stores will also be opened in Taiwan, Hong Kong and Southeast Asia.
But while Fontanelli stressed that MCM continues to see strong growth in China, untouched by the slowdown in luxury consumption in the country, it appears there is concern that its popularity among what the executive calls “hip, cool, contemporary consumers” could wane, particularly as these consumers age or if the brand is perceived as something trendy that eventually becomes less popular, as all pop-culture entertainment eventually does.
“We basically own the young and contemporary customer in China. That is one of the reasons for our success,” he said. “The challenge is that we had room to grow in the right environment or right positions [with retail locations]. If I had to choose another 10 locations, that would be more challenging because we are already the most important in China’s luxury environment. The second challenge is to maintain the appeal from a product point of view to feed consumer requests for something that is different, to try to grow demographics and give more visibility of MCM into different channels.
“The brand is young,” he added. “I think we have a lot of room to grow even further. We have the ambition to become the new school of luxury.”