This new joint venture is a plan to lower reliance on China, where most of Onward Kashiyama's apparels are produced, and also to take advantage of lower costs in Vietnam. 60 percent of Onward Kashiyama's women's apparel is produced abroad, Labor costs in Vietnam is said to be 40 percent lower than that of China, and overall costs will be 10 percent lower.
In terms of launching their brands in China, department stores are not the only ones. Mitsukoshi will finish up their contract with their store in Hong Kong and concentrate on business in China. Even though they carry high priced goods, Japanese department stores are capturing the hearts of the wealthy Chinese population.
Trading company Sojitsu will begin selling their McGregor brand in China from next spring through their subsidiary Nichimen Infinity. They target the wealthy Chinese population and will sell 70 percent of products sold in Japan. They will be sold in 3 Japanese department stores in China and hope to have 6 more stores by 2008.
Onward Kashiyama will be enforcing their brand Rose Bullet in China which was launched simultaneously as the launch in Japan, China, and South Korea. They will also be launching a new brand in China and increase the number of stores to 110 by February 2007 from the present 84.
They project retail sales in China will increase by 50 percent this fiscal year to 3.3BJYen. They are putting strength on individual stores. Renown will be strengthening their position in the Chinese market with their brand D'urban and Kent & Curwen, both a high priced range. They will be bringing in other brands and in total be sold in 89 stores, from their 79 at the end of the year 2005.
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