The Shiatzy Chen [陳夏姿] story is fascinating to me on so many levels: A business built by a husband and wife team. A Taiwanese fashion label carving out its own market. The challenge of competing in China’s retail market. The leadership transition to their son, Harry Wang.
Shiatzy Chen began her luxury fashion label in 1978 with her husband. Neither had formal fashion or retail experience. In 1990, they opened an atelier in Paris, then a retail store in 2001 – becoming the first Taiwanese brand to set up shop in Europe. She’s frequently described as “the Chanel of Asia”.
In 2003, the brand entered China, then Hong Kong in 2004. In 2008, Shiatzy Chen showed at Paris Fashion Week, and has presented every year since. Today, the label has 16 locations in Taipei, 23 elsewhere in Taiwan, and 24 international boutiques including in Japan, Malaysia and Paris.
I dug around online to see what I could learn about the Shiatzy Chen story…
From a June 2011 interview with Shiatzy Chen CEO, Harry Wang, in The Business of Fashion:
Do you see your aesthetic as being Chinese?
In the beginning, we did something very Chinese. But between 1985 to 1992 we were actually doing something that looked quite Western. It worked at the time because Western labels were not allowed in Taiwan. But after 1992, when all the big Western brands starting coming in, we felt that in order to be different we needed to do something more than just Chinese pieces. Today, we are known for taking Chinese details – embroidery, buttons, collars – and using Western cuts. We purchase all our fabrics from Italy, but more than 50 percent of these are our own designs.
You’ve been showing in Paris for a few seasons now. Apart from international exposure, what were you hoping the Paris show would do for your business?
I was hoping it would bring me some wholesale revenue, which turned out to be not very successful. But apart from that, we wanted to bring into focus the positioning of our brand. In Chinese department stores, we sit on the ground floor, right next to the big players. Our store in Beijing is right next to Fendi; in Hong Kong we are right next to Chanel. So, we are aiming to position ourselves higher on the global stage. We are not trying to fool customers, but rather trying to position the brand differently. We want to position ourselves as the most luxurious Chinese brand.
What about the Chinese customer? When they come to Shiatzy Chen, what are they looking for?
In Taiwan and China, they buy mostly the embroidered pieces. They feel, in terms of the craftsmanship and design, that Shiatzy Chen is very good; probably one of the best, and definitely comparable to the Western brands. They feel proud to wear our designs because we produce a very limited number of the same item. For instance, the jacket you just saw, we produced roughly one hundred pieces across four sizes. We manufacture about 70,000 pieces a year in total across 100 styles.
How is the business performing?
Currently, we are making money in all of the markets in which we operate. The margins for the retail business are very good in Taiwan, but a bit less so in China because the expenses there are very high. Hong Kong is the most expensive market, followed by Shanghai.
Our margins in China are lower even though we sell the clothes at higher prices there. If I compare China with Taiwan, in China the rental is at least four times more, and sales tax is 17 percent compared to only 5 percent in Taiwan. Advertising costs are at least four times more per page. So, as an independent brand in China you can earn about 10 to 15 percent in operating profit, depending on your skill. In Taiwan, you can earn more.
Top Photo Credit: Marc Gerritsen for The Brander
Bottom Photo Credit: CR Fashion Book