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Strike up the brand

Strike up the brand

Write: Zeruah [2011-05-20]

Li Guilian's 28-year-old company is venerable in China's clothing industry, one in which the average lifespan of companies is less than a decade.

But rather than resting with a settled, well-earned and familiar routine, the Dalian firm is starting a second life.

After producing menswear for internationally known brands for years, Li is now promoting her own - Trands.

"You are always just a working girl if you only make clothes that bear other people's brands," says Li, chairwoman of Dalian Dayang Trands Co Ltd.

Dayang, founded by Li in 1979, has been China's largest exporter of men's suits for 10 consecutive years. Its export volume is expected to exceed 5 million suits this year.

China is certainly one of the world's largest clothing exporters. But only a few of the hundreds of millions of local workers powering the pedals of sewing machines are making clothes labeled with a Chinese brand.

Li is one of the few ambitious Chinese OEM (original equipment manufacturing) clothing companies trying to build its own brand as her export-oriented business faces increasing challenges, including appreciation of the renminbi and competition from emerging economies like Vietnam and India that are following in China's footsteps by cheaply producing goods.

With operating revenue of 650 million yuan last year, Dayang was selected by the World Economic Forum (WEF) in March as one of the 125 founding members of the Community of Global Growth Companies.

Dayang was the only Chinese clothing manufacturer among those fast-growing companies that the WEF says are destined to join the ranks of global multinationals in the next five to 10 years.

The future stars have annual growth rates exceeding 15 percent, have demonstrated leadership in a particular industry, and most importantly, are expanding outside their traditional boundaries, says Klaus Schwab, WEF founder and executive chairman.

As a leading OEM clothing company, Dayang is producing clothes that bear its own label to cash in on the country's huge potential in the premium menswear market.

The company plans to open 25-30 boutiques selling its own brand in major Chinese cities in the next five years .

Trands has a wide product line that includes suits, jackets, shirts, overcoats, pants and T-shirts. It has now opened four boutiques, averaging about 400 sq m in size, including one in Dalian, Northeast China's Liaoning Province, two in Beijing and one in Taiyuan, North China's Shanxi Province.

The latest Beijing outlet recently opened in the new Seasons Place Mall on Financial Street, the capital city's newest luxury shopping mall, which is also home to luxury icons LV, Gucci, Ferragamo and Versace.

A set of Trands suit at the mall is priced at about 6,000-18,000 yuan.

"Being the largest exporter of men's suits in China is no longer exciting news to Dayang. Building a long-lasting brand is our primary target," says Li's son, Shi Xiaodong.

Li handed control to Shi early this year, making her 34-year-old son president of Dayang.

"My mother is only 60 and still quite young in terms of managing a family business. But she wants me to take the baton to push Dayang to a new frontier," Shi says.

"She laid a solid foundation during the first 28 years. For the next 28 years, my job is to build our own clothing brand and I will hand it to the next generation when I retire," says Shi, who graduated from Tulane Law School with Master of Laws degree and Bentley College with a MBA degree.

Li, who was a farmer before founding Dayang, believes the young man with an overseas education could well accomplish her ambition.

Another of Dayang's trump cards is to work with world-class designers. Ivano Cattarin, the former chief designer of Giorgio Armani, signed a four-year exclusive contract with Dayang a year ago and became the company's chief designer.

Cattarin, 72, used to produce trend-setting patterns and was responsible for nearly 40 percent of Armani's line of clothing. He says he wants to spend the rest of his career in China, a country that he believes will be the center of the world's garment industry in the near future.

Learning curve

Although Li and Shi are confident about the quality of their clothing, the real challenge is to persuade the country's nouveau riche to accept a Chinese brand when they have abundant choices in leading international labels. The "Made-in-China" tag is associated with low prices, not luxury.

The country's clothing industry is highly competitive - fully six Chinese brands die out on average every day, according to figures from Fashion Shanghai 2006, one of the nation's major fashion expositions. Compared to their international counterparts, domestic companies still have a long way to go to catch up in brand management and marketing.

Cattarin, who now spends about one-third of the year at Dayang, believes the lack of their own style is another problem facing Chinese clothing companies.

"In terms of quality, there is no big difference between clothes made in Europe and those made in China. Sometimes the quality of men's suits produced by Chinese companies like Dayang is even better than suits made in Europe," Cattarin says.

"But Chinese companies are still busy producing clothes for export, while Italian clothing companies have been concentrating on brand building since several decades ago. That's the difference," says Cattarin, who started off at early age as a tailor.

Cattarin says he is trying to help Dayang find its own style as soon as possible. He spends most of his time with Chinese designers at Dayang, "teaching them the way of thinking".

"Language is a problem. There is something lost in translation", Cattarin says. "But clothing is our common language."