Tuesday, 11 January 2011
Luxury fashion brands continue Brazilian expansion
“Why are we not here?” François-Henri Pinault, the chief executive of PPR, whose brands include Alexander McQueen and Gucci, was overheard asking while visiting shopping centre Cidade Jardim in São Paulo recently, according to Women’s Wear Daily. Why not, indeed? I’ve written before about Brazil’s growing luxury fashion market, both in this blog and for Drapers Magazine, and WWD’s report further emphasizes the appetite of global brands to expand in Brazil. I’ve picked out the most interesting parts of the report, notably Chanel’s aggressive expansion in the country. Bruno Pavlovsky, president of Chanel’s fashion division, told WWD: “The Brazilian market is mature. This is now the time for us to consolidate our presence there, directly operating the boutique network as we do elsewhere.” Chanel recently closed its franchised store in Daslu, Brazil’s most iconic luxury retailer in São Paulo, and took over the management of its store in Cidade Jardim, which also houses Hermès and Louis Vuitton. Apparently, the move had an immediate impact on Chanel’s prices, since the luxury brand no longer had to pay a middleman, says WWD. They fell by about 30%, with instalment payments ranging from three to six months. As I’ve mentioned before, Brazilians often pay for luxury goods in instalments, rather than outright. According to WWD, plans are afoot for further shopping malls to open in Brazil, including Village Mall in Rio in 2012 and Shopping JK Iguatemi in São Paulo. I’m sure it’s only a matter of time before Mr Pinault does open more stores in Brazil (I’ve written about his appetite to do so before). But for anyone looking to expand in Brazil, seek advice. Brazil’s tax laws are complicated and its bureaucracy frustrating. But as I’ve said before, I quite like how difficult the country can be; it forces businesses to innovate and avoids identikit high streets and shopping centres. On another note, Fashion Rio starts today. Come back this week for coverage.