Chinese entrepreneurs have long sought to tap local demand for European luxury goods by distributing them for other companies—or developing private-label brands made in China and then marketed as European or American. A third option is just buying them, as the Hong Kong-based billionaire brothers Victor and William Fung did with European fashion houses Cerruti 1881 in 2010 and Delvaux in 2011.
Then there’s China Garments, a state-owned apparel maker whose products range from Mao suits to military uniforms to riot gear. The company recently unveiled plans for the launch of China’s first luxury men’s apparel brand aimed at domestic consumers yet designed and produced in Italy, the stomping grounds of globally recognized brands such as Gucci (PP:FP), Ermenegildo Zegna, and Salvatore Ferragamo. The brand’s name will marry two words, Sorgere in Italian, meaning “to rise,” and Sheji in Chinese characters, meaning “nation.” The label’s clothes will be produced by the same Italy-based company that manufactures suits and slacks for Christian Dior and Lanvin. “We want to turn round the old thinking that we can only do processing,” says China Garments Chief Executive Officer Zhan Yingjie. “China has the ability to create its own” luxury brand.
Francesco Fiordelli, an Italian designer who has worked at Hugo Boss and Gucci, has been hired as Sorgere’s fashion director, while Soragna (Italy)-based Raffaele Caruso is making its made-to-measure and ready-to-wear collections. “We need to educate consumers,” says Zhan, adding that Sorgere’s top two lines, dubbed Black and Blue, will carry a “Made in Italy” tag. “China isn’t just a global manufacturing center and Italy a global design center. These two roles can be mixed,” Zhan says.
Sorgere may struggle to persuade Chinese shoppers to switch their allegiance from established Italian menswear brands like Ermenegildo Zegna, whose suits are wildly popular among affluent Chinese. Sorgere is expected to charge about 20 percent less than top international brands. Zegna charges about $2,400 for double-breasted wool and silk suits. “Made in China products are presumed to be of low quality by the Chinese themselves,” except where China has unrivaled expertise such as in jade or silk, says Laurence Lim Dally, managing director of Cherry Blossoms Market Research in Hong Kong. Imported luxury goods “get their prestige from the craftsmanship Chinese still do not have,” he says.
Nonetheless, as investors get a better understanding of what appeals to emerging market consumers, “creating something from a blank sheet of paper is less to be feared than perhaps it was before,” says Hugh Devlin, a consultant who heads the luxury goods practice at law firm Withers Worldwide in London.
Not everyone agrees: Fung Capital, the investment arm of the Fung family that controls the big Hong Kong- based wholesaler and distributor Li & Fung, said on Jan. 26 it is in talks to buy an 80 percent stake in French fashion house Sonia Rykiel. “It takes time to become a luxury brand,” says Cherry Blossoms’ Lim. “Local brands are rather recent and cannot claim a heritage, a history and beyond, a myth. Beyond quality, this may be the major gap to bridge with Western luxury brands.”
The Sorgere deal came about after Raffaele Caruso CEO Umberto Angeloni spoke on the merits of making high-end apparel in Italy at a conference in Beijing in October. “Rather than having a fake Italian brand made in China, it would be wiser to have a real Chinese brand made in Italy,” Angeloni said in his speech. Two months later, Zhan, Fiordelli, and Angeloni presented a sample of Sorgere’s first menswear collection to government officials in Beijing. The full range will be shown at a fashion show in the Chinese capital on Mar. 29 and available in the brand’s own retail stores first in China this summer and then internationally, including in New York and Milan.