Investment

Levi's Denizen sets up shop in Shanghai

By Zhou Yan (China Daily)
Updated: 2010-09-03 15:03

SHANGHAI - Denim giant Levi Strauss & Co said that it plans to open 20 Denizen outlets in China by the end of this month, selling the newly launched global brand primarily targeting Asian youngsters.

"These stores will be located in Shanghai and the adjacent provinces of Zhejiang and Jiangsu, due to the strong purchasing power in the region," said Dickson Chu, general manager of the Denizen brand in China, on Thursday.

The first Denizen store in China opened last Tuesday at the high-end Jiu Guang Sogo Department Store on West Nanjing Road, a shopping hub in Shanghai.

The California-based denim company plans to open 50 outlets in Asian markets, including China, South Korea, India and Singapore, by the end of this year.

Another 100 Denizen shops will be rolled out in 2011 mainly in northern China's big cities including Beijing, Tianjin and Dalian, Chu said, adding that there will be more than 1,000 Denizen outlets across the nation by 2015.

"We'll start in first-tier cities, and gradually expand our footprint into lower-tier cities," he said.

"The size of the market, nourished by Chinese youngsters' appetite for jeans, is large enough to realize the company's ambition for so many stores, but ideal locations will be difficult to find," said Qiu Yujun, an analyst with market research firm Planet Retail.

The Denizen brand was officially unveiled on Aug 18 in Shanghai, the first time the company has launched a new brand outside its headquarters in the United States.

"It took five years for us to prepare for this brand that taps into China's upwardly mobile, youthful consumers," Chu said.

Denizen, which means "inhabitant" and targets the 18 to 29 age group, is "outfitting a new generation" with fashion essentials at affordable prices ranging from $40 to $60, 40 percent lower than its premium Levis brand, the company said.

"It may take six to nine months for us to turn a profit, depending on the economic scale," Chu said.

The cost of making Denizen, which is almost equal to that of manufacturing Levis, is expected to drop when its revenue can reach 5 billion yuan from approximately 1,000 stores, he said.

Thanks to rising incomes in China, household names including the luxury brand Louis Vuitton and fast-fashion retailer Zara have jumped into the market to win millions of potential customers.

"Denizen may face stiff competition from both local and international rivals, even though the market size is huge," said Zou Zhengfang, general manager of Netherlands-based design firm Studio Dumber in China.

China Daily