Richemont sells Shanghai Tang as China prefers foreign luxury
Richemont has sold Hong Kong-based dressmaker Shanghai Tang to
Italian fashion entrepreneur Alessandro Bastagli and Cassia Investments
Richemont has sold Hong Kong-based dressmaker Shanghai Tang, showing that a Chinese name still doesn’t have the same ring to luxury shoppers as a French or Italian one.
Italian fashion entrepreneur Alessandro Bastagli and private equity fund Cassia Investments bought the brand, one of the first Chinese fashion labels to seek a global presence, according to a statement Monday. It’s the first sale of a luxury unit by Geneva-based Richemont since 2007, and follows a pledge by Chairman Johann Rupert in November to fix or sell underperforming businesses.
“The disposal of Shanghai Tang is a logical step,” Rene Weber, an analyst at Vontobel, said in a note. “The brand was neither material in terms of sales nor of profit.”
Hong Kong Handover
Richemont didn’t disclose the price for Shanghai Tang, one of four labels that Sanford C. Bernstein analyst Mario Ortelli said in 2013 he expected might be sold. The others were Dunhill, Chloe and Azzedine Alaia. Richemont said that year that it decided against any divestments, and has since reconsidered. Its shares were up 0.7 per cent at 3.04pm. in Zurich.
The company has restructured Dunhill and rejuvenated Chloe’s management with a new creative director. Other small Richemont brands include Purdey, a maker of luxury shotguns, and Lancel, a French pursemaker that the company considered selling in 2013.
Sir David Tang, who now writes a column in the Financial Times, started Shanghai Tang as a bespoke tailor shop in 1994, combining Chinese and western design influences and expanding into accessories and housewares. While the brand attracted buzz about China’s growing cultural and design influence around the turn of the millennium, when its form-fitting qipao dresses were worn in Wong Kar-Wai’s film In the Mood for Love, its Mandarin collars never caught on in a big way in Europe or the U.S.
The original Shanghai Tang location in Hong Kong closed in 2011 due to high rents, and the brand also shut a New York shop. The fashion maker has 32 stores currently. Rival Hermes International has provided competition with its Shang Xia brand since 2010.