Harrods upbeat on beauty prospects and China, to open Chinese ultra-luxe standalone in 2020
The boss of Harrods said the retailer is “unbelievably well placed to take advantage of” the younger shopper who wants “to have really great quality beauty” and is upbeat about the chances of success for the firm’s new beauty chain. He also sees a big opportunity in targeting the ultra-luxury market in China, especially younger shoppers, and will open a permanent standalone there in 2020.
Harrods MD Michael ward is overseeing the opening of the first of the firm’s new H Beauty concept in the Lakeside mall in Essex early in 2020 and this will be followed by a debut in Milton Keynes.
It’s a key move as the company works to make the most of a sector worth $532bn (£409bn) globally with Britain being the fourth largest market worldwide (behind the US, China and Japan) and the largest in Europe.
In an Interview with The Telegraph, Ward also said that the high street has itself to blame for some of its problems as many stores have stayed the same for too long and their levels of service aren’t good enough.
“Unless you continue to reinvent yourself, you become boring and average,” he said. “I don't mean to be rude, but if I go into a shop on a high street, I think the only thing that they're trained at is the great ability to turn in the opposite direction whenever you want attention. You know, I always used to invest in retail companies on the basis of why would I go and shop there? I don't invest in retail business anymore.”
However, not all of their problems are self-inflicted and he thinks the business rates system is biased against retailers with physical stores. It’s estimated that the Harrods store in Knightsbridge will pay over £17 million for 2019 in business rates, and Ward said “there isn't a level playing field” compared to online sellers who pay much less on their giant warehouses.
“Until there is a fundamental review of the business rates system, then I think that the high street is really doomed,” he told The Telegraph.
Ward also said that Harrods is targeting China, the country that provides the single largest group of the retailer’s customers — 20% of spending in the Knightsbridge store comes from Chinese visitors.
The newspaper said the company has spent the past decade hosting events and opening pop-up stores in China and will open its first permanent store there in 2020. The Japanese villa-style store called The Residence will focus on the wealthiest private clients. It will be in the Pudong district of Shanghai and the company will be hoping to see plenty of Millennials.
“If you look at all of the reports, they say, quite categorically that all of the growth in the next five years is going to come from south-east Asia and is going to come from Millennials,” Ward said. “So we've got to go after that. It's very important that you follow the money. We see continued growth of China, but we see a need to be a more permanent resident in China.”
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