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Harrods in talks to open Shanghai store

Updated: 2010-07-23 11:41

 

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London-based luxury department store Harrods is holding talks with the Shanghai municipal government on the opening of its first store outside the United Kingdom in the historic Bund area.

The British emporium is keen on opening a department store in one of the imposing buildings where British banks and merchant houses once traded, a real estate agent familiar with Harrods' plan said.

But the choices for the British retailer are limited to only a few locations that are large enough for Harrods, which operates one of London's largest department stores.

Its proposed venture in China was initiated by Managing Director Michael Ward.

"China is the most probable, but we would have to do a lot of work first," Ward said in The Guardian newspaper.

Hannah Hodges, Harrods' corporate affairs manager, said: "No plans have been confirmed to open a store in Shanghai."

Harrods is already a well-known purveyor of luxury goods among well-to-do Chinese consumers who make frequent overseas shopping trips.

The Guardian reported that the number of Chinese travelers who shopped at Harrods in the first six months of this year rose 125 percent from last year.

Eugene Tang, head of retail at Jones Lang LaSalle in China, said he was aware of talks about Harrods' Shanghai outlet, but he estimated that it would take a long time before any lease agreement can be reached.

"We don't expect to see the opening of Harrods in Shanghai in the next couple of years," Tang said. "It will take much longer for them to get things right before the opening."

Harrods' move to China is seen as a break with tradition for such a high-end retailer.

"Renowned for their conservative business philosophy, most premier British retail brands don't go overseas for expansion," said Regina Yang, an analyst with Knight Frank, a leading property consultancy.

But other British retailers have already made a dash for the yuan.

Marks & Spencer opened its second store in Shanghai's Yuyuan Garden last month, and it is already scouting locations for its third branch, according to Yang.

High-end brands such as Louis Vuitton, Zegna, Gucci, Dior, Tiffany, Hermes and Prada all opened stores in Shanghai between April and June to meet luxury buyers' growing demand.

China has overtaken the US to become the world's second-largest luxury goods market, with Japan holding the top spot. Sales of luxury goods in China grew 12 percent in 2009 to $9.6 billion, accounting for 27.5 percent of the global market, according to Bain & Co.

In the next five years, China's luxury spending will increase to $14.6 billion, making it the world's largest luxury market.

The landmark London department store Harrods was acquired by Qatar Holdings on May 8 for 1.5 billion pounds from Egyptian billionaire Mohammed al-Fayed. Harrods, in London's Knightsbridge district, has over 90,000 square meters of retail space across more than 330 departments.

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（中國日報網英語點津 Helen 編輯）

About the broadcaster:

Nelly Min is an editor at China Daily with more than 10 years of experience as a newspaper editor and photographer. She has worked at major newspapers in the U.S., including the Los Angeles Times and the Detroit Free Press. She is fluent in Korean and has a 2-year-old son.