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Tapestry deepens push into China, undeterred by luxury market slump
Tapestry's planned expansion in China is unusual, both for the company's willingness to tap lower-tier cities where most Western competitors are reluctant to tread.
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People walk past a store of the Coach luxury fashion retailer in a shopping district in Beijing, China, October 19, 2022. (Reuters /Thomas Peter)
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aoji, an industrial city in northwest China with a population of 3 million, doesn't conform to most people's idea of a luxury goods market. Sometime soon, however, it will be home to a store for American brand Coach.
The store is one of 30 in China that Coach parent Tapestry Inc TPR.N is looking to open in the coming 12 months, the company's Asia Pacific president Yann Bozec told Reuters.
Tapestry's planned expansion in China is unusual, both for the company's willingness to tap lower-tier cities where most Western competitors are reluctant to tread, as well as for its timing - coming as it does amid a deep slump in Chinese luxury sales. It also follows some 60 Tapestry store openings in China over the last two years.
It's a business strategy that analysts say allows Tapestry, one of the largest luxury retailers in China, to capitalise on its position as a purveyor of so-called "accessible luxury" at a time when many higher-end labels have gone further upmarket and Chinese consumers have become more cost-conscious.
Brands from Louis Vuitton LVMH.PA to Gucci PRTP.PA and Burberry BRBY.L have an established presence in China's biggest metropolises such as Beijing and Shanghai as well as second-tier cities like Wuhan and Xi'an.
In contrast, cities on the lower end of tier rankings - determined by metrics such as economic output, consumer behaviour and population size - have been shunned, seen by many brands as lacking the luxury malls that their cachet of exclusivity demands.
But where a Louis Vuitton bag or a Gucci dress can sell for thousands of dollars, Tapestry's price points are lower. Coach largely sells bags below $1,000 while Kate Spade, another Tapestry brand, prices its dresses at around several hundred dollars.
