Lane Crawford president Andrew Keith talks about why selecting the right mix of goods for Chinese consumers is like conducting an orchestra. Unlike most department stores in the region, which lease store space to individual brands, Lane Crawford buys its own inventory and attracts customers who trust its fashion choices

Lane Crawford Taps Into Chinese Lifestyle

Company president Andrew Keith talks about why selecting the right mix of goods for Chinese consumers is like conducting an orchestra.

JASON CHOW and

WEI GU

Oct. 20, 2013 11:43 a.m. ET

Few luxury brands have been in Asia as long as Lane Crawford, the department store founded in 1850 by Scottish merchants in Hong Kong. But until now, its expansion into mainland China, an important luxury market, has been slow, and has yielded mixed results. Last month, Lane Crawford returned to Shanghai with a new 150,000-square-foot store, after closing one in 2006. In the first half of 2014, the company is planning to open a new store in the western city of Chengdu, its fourth store in mainland China. The company is picking up speed at a time when affluent Chinese consumers start to look for good quality products beyond big brand names. Lane Crawford specializes in bringing lesser-known brands to Asia. Unlike most department stores in the region, which lease store space to individual brands, Lane Crawford buys its own inventory and attracts customers who trust its fashion choices. That means the company’s merchandising is key to the company’s success. Andrew Keith, the president of Lane Crawford and former head of its men’s department, spoke to The Wall Street Journal about why Chinese men are fashion trendsetters and why selecting the right mix of goods for Chinese consumers is like conducting an orchestra. Edited excerpts:WSJ: Are you seeing tastes change among Chinese customers?

Mr. Keith: Our consumers are moving from buying products that reflect status toward really appreciating products and how it reflects their lifestyle.

It’s not buying a statement piece to show off. It’s about feeling confident in purchasing to your lifestyle requirements.

WSJ: Which products are selling well?

Mr. Keith: We’ve seen strong growth in our women’s fashion. Our home and lifestyle areas are growing quickly. And we’re seeing great growth opportunities in men’s—not just in designer fashion but in lifestyle accessories. In Shanghai we’re breaking down the traditional department-store walls. Home and lifestyle accessories will be merchandised throughout the store. The concept behind that is that’s the way our customers are shopping. They’re not necessarily coming for one item.

WSJ: What’s your China strategy?

Mr. Keith: Our strategy is, with the opening of our Chengdu store, we’ll have Shanghai, Beijing and Chengdu as our anchor points. From there, we use digital commerce to reach customers across China.

WSJ: Chengdu is considered a second-tier city. Is it ready for Lane Crawford?

Mr. Keith: It’s a rapidly developing city that’s outperforming GDP growth in China. You have a customer demographic that’s relatively young and very entrepreneurial and very driven by lifestyle, in terms of how they spend.

WSJ: Why do you see such potential with male consumers?

Mr. Keith: Currently, we’re about 70% women [in sales value] and 30% men’s. But we think there’s great opportunity to grow the men’s portion. We’re seeing men enjoying the shopping experience and making their own shopping decisions. Increasingly, the younger generation doesn’t want to look like their fathers. We’re seeing a growth in sportswear, shoes and accessories—it’s about how to personalize.

We’ve a very successful handmade-shoe program where you can choose the upper and a specially crafted sole. Men are getting really involved in how they put things together.

WSJ: How does Lane Crawford manage its relationship with brands?

Mr. Keith: We work with international big brands, but we don’t work with Louis Vuitton or Prada and brands that have a very specific brand strategy for this market. Our big brands are Alexander McQueen, Givenchy, Celine and Christian Louboutin.

WSJ: How do you, personally, stay on top of trends?

Mr. Keith: I get information from online, digital, team updates, and by talking to my industry counterparts. It is a relatively small business in terms of influencers, so we do share information and thoughts on how things are progressing.

WSJ: You are taking the risk by buying a lot of inventories from brands, and you are doing it with hundreds of brands. How do you make your decisions?

Mr. Keith: Our business is very much an arts-and-science business. It is not based just on fact. Sometimes intuition and gut feeling play awfully a lot in our decision-making process for me. It is about getting the balance right, having all that creative information married with some facts to enable you to make decisions that are based on instincts but are also grounded in historical or financial data credibility.

WSJ: Which comes first, instinct or data?

Mr. Keith: Intuition comes first each time. You need to have a sensitivity to all sorts of inputs. You develop a gut instinct. Sometimes that gut instinct can be quite risky, and you are not going to have the support. But I would say nine times out of 10, it was the gut instinct that was right.

WSJ: What if it isn’t right?

Mr. Keith: There is no such thing of getting it wrong. Actually, getting it wrong is often in many times as beneficial as getting it right, as long as you go back to your drawing board and say this is what I have learned.

What I do is like conducting an orchestra. You get all these different parts at play. We might have bet too deep on one style, but then we got other things in the portfolio that balances it out.

It’s more about getting the general movement right and the sound is creating magic. That’s what I am trying to do.

Résumé

Education: Bachelor’s in fashion design, Kingston University, 1991.

Career: Moved to Hong Kong in 1995 and spent five years as Design Director at G2000. Joined Lane Crawford in merchandising in 2000 and became president in 2011.

Extracurricular: Enjoys traveling as an excuse to try local cuisines and to collect tribal and handcrafted textiles, pottery and artworks. For sports, likes yoga and swimming.