Doing the Shanghai Tang [p.2]

The fanfare soon waned as Madison shoppers passed on Shanghai Tang, an overpriced, mini Chinatown. In June 1999, just 19 months after opening night, the store was forced to shut down and move to a smaller, uptown location on Madison. Tang had misjudged New York’s market for high-end Asian chic. The Asian financial crisis that began in 1997 was hurting sales in Hong Kong. When SARS hit in 2002, business fell to record lows.

The new CEO, Raphael le Masne de Chermont of the Richemont Group, which also created Piaget, Baume & Mercier, joined Shanghai Tang in 2001. He had to turn the company around and soon found Joanne Ooi, a Chinese American entrepreneur raised in the U.S. and living in Hong Kong. Ooi was running a successful showroom selling luxury European brands and her own modern, Chinese-inspired designs.

True to her bold character, Ooi told le Masne de Chermont the problem with Shanghai Tang: it was an overpriced warehouse of Chinese kitsch, which catered to and only garnered interest from high-end tourists. Le Masne de Chermont immediately recognized Ooi’s talent and potential to revitalize the brand. He hired Ooi as the company’s creative director. They set out with the vision to create an authentic Chinese luxury lifestyle brand with global appeal.

Ooi needed to change the image that Shanghai Tang had developed from their costumey designs. They started with their highest-profile product, the women’s ready-to-wear line. During her first year with the company, Ooi produced designs that were modern and high fashion. But the brand still did not speak to the Chinese buyer, who would rather spend their money toting European brands, a recognizable sign of wealth.

To stand out in the international marketplace as a China-based brand, Ooi realized that Shanghai Tang needed a story and image that the global consumer could connect with.

“Shanghai Tang is not a fashion brand per se, but a lifestyle brand,” Ooi explains. “It has totally different inspirations, potentially, than other international brands and that is a major distinguishing factor in how we could be value-added in a very competitive international marketplace. After all, we are based in Hong Kong, which is off the beaten path of Paris, Milan, and London. I suddenly realized that there was a treasure trove of thoroughly unique inspiration in China and we should mine it for all it was worth. Shanghai Tang is not just about visual design, but a fully integrated marketing platform and story. That packs a dual punch, compared to other ‘mere’ fashion brands.”

Ooi came up with the idea to incorporate a China-based theme for each collection. The theme had to be one that consumers could identify with, yet vast enough to adapt to changing fashion trends. The first of these collections, fall/winter 2003, was inspired by traditional costumes of the Miao, a Chinese minority group. It sold better than the previous year’s collections. The latest fall/winter 2006 collection, “Shanghai Redux,” is inspired by the heyday of colonial Shanghai in the 1930s, with design elements reflecting Chinese art deco, jazz and flappers.

Under the leadership of le Masne de Chermont and Ooi, each collection has become stronger with every passing season. Their strategy and main source of inspiration comes from building alliances with reputable partners.

The latest partnership is with Beijing’s Central Academy of Fine Arts (CAFA), one of China’s most prestigious fine arts educational institutions. Shanghai Tang is underwriting CAFA’s first graduation project for the institution’s newly established Fashion Design Division, a groundbreaking educational initiative for China. Ooi plans to exhibit pieces from the inaugural graduating class of 2006 in Shanghai Tang’s flagship stores around the world.

“It’s incumbent on Shanghai Tang to nurture the up-and-coming generation of designers from China at a grassroots level,” says Ooi.