A touch of Italian style

Fashion house Max Mara opens prestigious flagship store at Beijing plaza

Before the opening ceremony of Max Mara's biggest flagship store in Asia, the chairman of the Italian fashion house, Luigi Maramotti, was being photographed and giving interviews in the stylish building at China Central Place, a premium commercial complex in Beijing.

The 57-year-old Italian, wearing a cream-colored suit with a brilliant-blue pocket square and a narrow tie, says he has been traveling to China for 10 years. However, recently, he has been frequently visiting second and third-tier cities, rather than just Beijing and Shanghai as before.

He has been involved in the running of the company, founded by his father Achille Maramotti in 1951, for the past 33 years.

"In China, our business has been very steady in the last 10 years, with an average year-on-year growth of 15 percent to 20 percent," Maramotti says.

Max Mara has opened 320 stores on the Chinese mainland since it entered the market 14 years ago. "That means we are obviously very present and sophisticated in second and third-tier cities," he says.

In fact, Max Mara's presence in smaller cities is but one example of the transitions foreign branded names face in conquering China's sluggish up-market fashion business.

"We considered 2013 a critical year regarding the slowdown of many brands in China," he says.

However, Max Mara posted a double-digit year-on-year growth in 2013, and Maramotti considered it a success.

He has not adjusted the company's strategy in China to boost its sales. The company is not a public one and, therefore, it is not necessary to force it to grow to show numbers to investors.

"We decide to launch new projects or new lines of business when we think we are ready. We do it in a way that we are capable of developing it in the long run," he says.

Given the nature of the brand's low profile in doing business, Maramotti is not announcing or doing things that grab the headlines.

As China is becoming a more mature market where consumers are not squandering money on expensive goods, Maramotti regards it as an opportunity for a brand like Max Mara, which has long experience in the fashion market and has a vision.

This outlook is also in line with Maramotti's personal style. Standing among fashionistas and celebrities, Maramotti looked both elegant and at ease.

He was unwilling to say much about his personal life. He seldom takes part in sports.

"My sport is taking lifts, going up and going down," he jokes.

Still, sustainability is a word that Maramotti has been thinking about for a long time.

The opening of the flagship store in Beijing became a test of Maramotti's understanding of the marketplace.

To coincide with the opening of the store, Max Mara launched a special limited edition bag and sneakers with each piece stitched with "Beijing Max Mara Limited Edition".

The new four-story store features a high and instantly recognizable facade, in keeping with the company's policy of opening stores of bigger size and a higher profile in the last three to four years.

"We are beginning to open a number of flagship stores of 500 square meters to 700 square meters," he says.

The company is adding 25 to 35 new stores in China every year. For its flagship brand Max Mara, it has more than 60 stores around the nation.

But Maramotti says he hopes to generate increasing turnover in the same location, rather than adding more stores.

With his long association with the fashion business, he emphasizes the importance of creativity.

"We have to fight to leave room for creativity," he says. "The business side should not be the only driver."

His management path in the company started in 1981 when he became the marketing manager. Eight years later he was promoted to the position of managing director.

He has drawn on his working experience in the United States and France, which he gained after receiving his baccalaureate in Italy.

"The United States is more about marketing, and France is more about tradition, creativity and luxury," he says.

Born in Reggio Emilia in Italy, he chose to return to Italy where he attained a degree in business administration from the University of Parma.

Since then, his life has been tied to Max Mara.

For Max Mara, a camel coat and a geranium red suit marked the beginning of the brand's story in 1951. It now operates in 105 countries, with more than 2,300 stores, and also through 10,000 multi-brand stores.

The group reached a global turnover of 1.3 billion euros in 2013.

In China, the first Max Mara store was unveiled in Beijing's China World Mall in 1999 through a distributor.

Based on the brand's successful performance in China, the company decided to work with the distributor to form a joint venture GBMax Ltd in 2009.

For Max Mara, Europe accounts for the biggest share of its global business. "It is the place where we originated from," says Maramotti. "However, China still represents a major global force as far as its growing appetite for quality products is concerned."

The third story of the store is devoted to VIP customers, where a handmade coat is priced at 26,980 yuan ($4,366; 3,269 euros). Maramotti says Chinese consumers can afford to buy at the brand's pricing.

As the company is making big investments in China, Maramotti says it is challenging to expand the access to a larger group of people.

"The brand is not about over-design, not about decoration," he says. "It is a dress for a woman who does not want to show off too much."

Luxury brands hit by slowdown

Years of rising Chinese affluence in major cities have made global luxury players salivate over the prospect of expensive apparels and accessories.

However, in the past two years, the destiny of luxury brands in China began to look shaky in the face of the anti-corruption and anti-extravagance policies.

The market declined to around 2 percent growth in 2013 from 7 percent in 2012 and is predicted to continue with slow growth in 2014, according to a report released by management consulting firm Bain & Co.

Louis Vuitton Moet Hennessy has seen a drop in demand from Chinese buyers in its home market and overseas, it said in late July after posting below-forecast second-quarter sales and profits.

Kering Group, the parent company of Gucci, witnessed a 4 percent growth in revenue in the first half of 2014, according to its first-half results released at the end of July.

Kering Chief Financial Officer Jean-Marc Duplaix told Reuters that the situation for Gucci remained negative in the Chinese mainland, where Gucci was in the final phase of appointing a new CEO.

However, he says business in China had improved since the end of last year, notably in big cities.

China still remains the largest consumer of luxury goods, contributing 29 percent of purchases in the global market in 2013.

The report also found that women's fashion brands have experienced a sharp rise, with women's wear and shoes showing robust growth from 8 to 10 percent.

Moreover, more premium brands are switching to China's e-commerce sector to attract consumers at home.

UK-based luxury brand Burberry Group has opened a virtual store on China's largest online shopping platform Tmall.

Major labels Emporio Armani, Marni and Bally are working with foreign portals such as Italian online fashion retail company Yoox Group.

Salvatore Ferragamo has also launched an official China online store with online luxury retailer xiu.com.

yaojing@chinadaily.com.cn