Harry Winston plans rapid China growth
TORONTO/NEW YORK (Reuters) - Harry Winston Inc, the luxury jewelry and watch retailer, is looking to more than double its store count in five years by tapping lucrative markets such as China, Russia and Dubai, its top executive said on Tuesday.
Its aggressive expansion plans will boost sales growth and take its store total to 50, from 19 currently, Chief Executive Frederic de Narp said.
A large part of the diamond-focused jeweler's growth will take place in China, where it will have about 10 stores in five years. The brand currently has one store in Beijing and one in Hong Kong.
"All luxury brands see China as a mass market. We see China as the most exclusive market in the world," de Narp told the Reuters Global Luxury and Fashion Summit in a telephone interview from Shanghai, where the company plans to open two stores by the end of the year.
"Nothing is too big, nothing is too beautiful, nothing is too expensive for Chinese today. They are on a quest for true luxury." said de Narp, who is making it the company's mission to "seduce and serve the creme de le creme of China."
De Narp, who has a Masters degree specializing in Asian business, began his career in Japan and is a fluent speaker of Japanese. Japan contributed 18 percent to Harry Winston Inc's sales in 2010.
The company will open a store in Dubai before the holiday season and one in Russia over the next year.
It is also planning store openings in markets such as Geneva, London, Macau, Hong Kong and Japan. It will look to enter markets such as India and Latin America as well over the long haul.
"There is room for opening these additional 30 salons around the world without compromising on the quality and exclusivity of the brand," de Narp said.
Demand for luxury goods in the United States was rebounding strongly, de Narp said. There are currently eight Harry Winston salons in the country and de Narp sees North America accommodating two or three more of its salons.
Harry Winston Inc sees annual sales growth of at least 15 percent in each of the next five years and will outpace the luxury market, de Narp said.
Founded in 1932, the iconic brand was immortalized by Marilyn Monroe when she sang "Talk to me, Harry Winston. Tell me all about it" in the 1953 movie "Gentlemen prefer Blondes." The words were part of the song, "Diamonds Are a Girl's Best Friend."
Harry Winston became entrenched in diamond lore since its founder by the same name donated the Hope Diamond, one of the world's most famous gemstones, to the Smithsonian Institution in Washington about half a century ago.
Globally, demand for rough diamonds is exceeding supply, leading to higher prices.
This puts Harry Winston in a sweet spot as its parent, Toronto-based Harry Winston Diamond Corp HW.TO HWD.N, runs a diamond mining business and owns a 40 percent stake in the Diavik diamond mine in Canada.
"We benefit greatly from the rise of diamond prices," said de Narp, who noted that the company sells 2 million to 3 million carats of diamonds every year.
Harry Winston, which sells about 3,700 watches a year, is looking to increase watch production and become a bigger player in the market.
Watches, which form less than 30 percent of its business, could become close to 45 percent of global sales four years from now, said de Narp, who took the helm at Harry Winston Inc last year after nearly two decades at Cartier, a unit of Swiss luxury goods group Richemont REIT.LU.
The majority of its watches, often studded with diamonds, are bought by men, he said.
(Reporting by S. John Tilak in Toronto, Phil Wahba and Dhanya Skariachan in New York; Editing by Brad Dorfman, Derek Caney, Dave Zimmerman)