2017-02-14 09:44

Business Leader: Knitting across sunnier shores

By Duan Ting

Top-end fashion chain St. John Knits International wants to be a key player in the Chinese mainland market, giving online sales a shot in the arm, CEO Bruce Fetter tells Duan Ting.

Bruce Fetter, chief executive officer of St. John Knits International, believes the great potential in the Chinese mainland market will lift the company’s performance, as well as its long-term development. (Parker Zheng / China Daily)

Upscale US fashion house St. John Knits International, which has amassed a global name for itself with its quintessential wool and rayon yarn garments, is upping the ante in taking on its challengers in the vast Chinese mainland marketplace, convinced that upgrading its consumption base and services would bring in hearty sales.

The Irvine, California-based group, founded more than half a century ago by model Marie St. John and her husband Robert Gray, took its stores tally on the Chinese mainland to seven late last year with the opening of their newest outlet in Beijing, but humbly admits it’s still way behind its rivals number wise in this part of the world.

“We see great growth potential there (Chinese mainland). We’re still definitely under-developed on the mainland, while many of our competitors have a lot more stores there,” Bruce Fetter, chief executive officer of St. John, tells China Daily.

The group is constantly scouting for suitable sites to get more stores off the ground in first-tier mainland cities but, for the lower-rung cities, it’ll be a toss-up between starting new self-owned stores and striking up partnerships with others.

Another thrust is on working out e-commerce solutions for online sales on the mainland, cashing in on the huge potential on offer via online platforms.

Fetter reckons that technology has had a great impact on the fashion industry. “Online sales are one of the most exciting things for our company”.

According to Fetter, St. John’s overall online sales worldwide had been convincing last year. The group sees a whopping 50-percent growth in revenue in the coming year, and its US online store is expected to be the group’s biggest revenue spinner over the next 18 months.

“We started our online sales platform in the US last year and we’re currently testing the platforms in Canada and Australia. Then, we plan to move the pattern to other countries and see how we’ll manage that,” he says.

St. John’s business links with the Chinese mainland are not something out of the blue, having built up the guanxi (relationship) there over the years through its tie-up with Shanghai-based, Hong Kong-listed Fosun Group — the mainland’s largest private conglomerate — which acquired a 33.3-percent stake in the former in 2013 for $55 million.

Having a ‘great partner’

The deal came to fruition, reportedly, after intense behind-the-scenes maneuvering by top executives from both sides since 2009. Fosun’s Chief Executive Officer Liang Xinjun had visited St. John’s stores and factories in Houston, Los Angeles and New York, followed by similar trips to the US by then Fosun Group Chairman Guo Guangchang and President Wang Qunbin.

“Fosun has been a great partner,” reminisces Fetter, explaining that Fosun has been able to play a useful role in the operation not only because of its investment, but also its local knowledge of the market and, for the first time, St. John has the people who do understand China and the business.

“Having them aboard makes things a lot more easier.”

Fosun, he notes, has been skillfully soliciting clients and espousing its other businesses, such as celebrity dressing in the movie industry, and St. John is able to leverage some of its partner’s businesses as well.

“We always focus on our domestic business. We feel that if we do it right there, it’ll do well, and then we’ll get exposure to the rest of the world,” says Fetter, adding that clients from all over Asia have traveled to New York, London, Beverly Hills and so forth.

As the largest women’s knitwear producer in North America, St. John has been one of the largest suppliers to the three largest and most successful specialty stores in the continent for many years, according to Fetter, although as a private company, he couldn’t talk about the exact market share of their business in the domestic market.

Dramatic changes

Currently, St. John has four stores in Hong Kong, with another slated to open soon. Worldwide, it launched new stores in South Korea, Japan, the United Kingdom and the Middle East last year.

In terms of retail and distribution stores, the group has more than 240 stores globally, 40 of which are self-owned. According to Fetter, 80 percent of St. John’s business is generated in the domestic market and 20 percent overseas, while retailing and wholesale take up 60 percent and 40 percent, respectively.

Fetter notes that the way people shop today is changing dramatically and the model of the fashion houses building beautiful stores, having great salespeople and presenting products is changing too.

“Nowadays, what everybody wants is having mobile devices to view and buy various products whenever and wherever they are,” he says. Customers come to shop at the stores with their research homework done in advance. Fashion houses just need to present the products in line with customers’ expectations and they won’t be disappointed.”

The ‘St. John woman’ in a timeless fashion world

Chief Executive Officer of St. John Knits International Bruce Fetter, who has been with the group for nearly 15 years since 1997, believes its core value hasn’t changed over time — it’s all about quality and timeless fashion.

St. John came into being in 1963 — the creation of former model Marie St. John and husband Robert Gray. Its business rolled out initiatively from a single dress designed specifically for a woman’s honeymoon. The product was recognized and appreciated by her friends and gradually found its way to the shelves of a department store in California.

“I was very fortunate being able to join this company at the time when the founding family was there and I spent nine years working with them  and learned a lot,” recalls Fetter.

He ultimately ended up as the company’s co-CEO with a daughter of the founders until new ownership took over, so he left for a while before being soon invited back to St. John.

Fetter says he has no qualms about professing his love for the brand, as well as the people in the town, and feels very proud to be part of the business.

In the early days, he recalls, they had spent a long time figuring out the core materials to be used for the products, including natural fiber wool, and nailing the problem that some clothing materials were scratchy at that time. As time progressed, they began specializing in women’s knitwear made of wool and rayon yarn.

“We want the clothes to maintain their shape and be comfortable at work or travel so that anyone wearing them could feel she could go places and look her best. We also wanted them to be durable. We think we’ve achieved that after years of evolution and accumulation and, for the past 54 years, we think we’ve done a great job in delivering the promise of quality.”

St. John then started working with people in Australia and across the globe in search of the right materials, and later began twisting and creating yarns themselves, building up their own dye houses so that they could dye the materials with the colors of their choice.

“St. John is truly a vertical business that enables the company to manage and control every step in the process, including maintaining the quality of the clothes and creating our own actual styles in the way which many other companies may not have the luxury to do so,” elaborates Fetter.

St. John prides itself in being a value designer, he says, although at a lower edge of the designers’ world. “We’re able to do our business profitably with prices that are lower than those of some of our upper-tier peers.”

As for St. John’s target customers, Fetter says: “Rather than the age range, what I would like to talk about is a woman’s lifestyle.” The target client is often someone who’s successful or in the middle of her career or maybe someone who isn’t working but is involved in her community or social setting and wants to dress beautifully and look good in what she’s wearing.

The “St. John woman” boasts a level of success in the affluence. “You don’t buy designer apparel if you don’t have the financial means,” he argues.

“Those who like to buy our clothes and for whom we design our clothes are those aged 30 or 35 who do get excited about our products. But, in reality, most of our clients are probably in their late thirties or forties and who continue wearing our clothes through life.”

Fetter does not hide the possibility of St. John being his last job, adding that it’s great to work in a business that every employee enjoys working for, and his management strategy is to offer directives to his staff rather than the details of how to get there.

Source: http://www.chinadailyasia.com/leaders/2017-02/13/content_15570634.html