Italy Leather Trader Furla Enters China

Furla, a Italy leather goods company, will invest millions of euros in seeking expansion in China through a joint venture with Sidefame, a Hongkong company. Its chief executive, Paul Fundaniele, said that a possible recession in the US and Europe is not the reason to stop investing in that area. Furla plans to double the number of stores in mainland China by 2011.

"By then, China will become the third largest Furla market in the world, next to Japan and Italy."

In response, Ouyang Kun, chief representative of the World Luxury Association, told reporters that "with the strengthening of China's economic strength, the new rich team will become bigger and bigger. China's affluent population only needs to reach 2 hundred million, which is the sum of all the rich people in Britain, France and other countries."

It is reported that the Furla entered China and established a joint venture with Sidefam, a long-term distributor of Hongkong's distribution network. Furla will own 60% of the shares and win greater control over the distribution network.

Prior to that, Furla sold the product wholesale to store Sidefame, while the retail price of Furla was 2 to 3 times higher than the wholesale price.

However, in Ouyang Kun's view, the main purpose of high-end fashion brands to open stores in China is to enhance the image of the brand in the eyes of Chinese consumers.

In fact, the sales of brand stores account for 60% of the sales channels at most, and the monthly rent is hundreds of thousands or millions of dollars. Generally speaking, luxury brands can not make profits in the 3-5 years of expansion in China.