3 Questions for. . . Ariane Zagury, founder and CEO of the Rue Madame Fashion Group in Hong Kong

‘In Hong Kong you have to perform throughout the entire year’.

Ariane Zagury, a 34-year-old former business banker from London, has made Rue Madame a leader in the Hong Kong retail scene. As a multi-brand store chain and partner for brands wishing to open their own stores, Rue Madame’s exciting, multicultural story evolves in synch with the sector.

In four years your company has carved out a great place in the Hong Kong fashion scene; can you tell us how you got there?

In 2008 I was a business banker with Goldman Sachs in London, and expecting my first child. My husband and I were both comfortable in our jobs, but we wanted to leave Europe. Asia was very appealing to us, and Hong Kong’s specific characteristics made it the clear choice. When we arrived, I saw there were no options between luxury and high street brands, yet contemporary labels were developing in Europe. I started thinking about starting my own business (. . . ). It took nine months between creating the business plan and opening my first Rue Madame boutique in the Causeway Bay district. I have to admit that in the beginning I was a young 30-year-old woman who started a project without really knowing what she was doing (laughs), so I relied heavily on advice from my entourage.

In choosing brands, for example, I trusted Brand Bazar in France; and today the company is my partner. Since the Sandro and Maje model inspired me, I contacted SMCP (Sandro, Maje, and Claudie Pierlot) and was lucky enough to work with them. That’s how I opened my first Rue Madame boutique.

At the end of six months, we had an opportunity to open a second boutique. Then we became partners with American Vintage, as part of their Asian expansion efforts, and we signed a contract with the SMCP Group to open their stores in Hong Kong and Macao (ed. note: In 2014 SMCP bought the company managing its Hong Kong boutiques). We just signed a new partnership agreement with the Phase Eight brand.

What difficulties did you encounter and, on the contrary, what surprised you by being easy?

The first real difficulty was experiencing the loneliness of an entrepreneur. Here, you have to understand that your contacts listen when you present a project, but don’t support you when you’re ready to make it real. You can, however, count on help from the French community — the consulate and chamber of commerce are real allies. The same is true for Invest Honk Kong, a para-governmental organisation. Once you’re in place physically, with a team and stores, things happen very quickly and naturally.

Financially as well, the situation is different. There are a lot of investors, but the credit market doesn’t really exist. So, to open a boutique, even if there are no leasing fees, you have to have an enormous CAPEX, since stores are often in prestigious shopping malls and demand very high rent. Our second store started in a less-than-perfect placement, but in the right mall. We opened and then, when another place became available, we moved. When you’re small, you have to hold your own with the big groups, so you have to grab opportunities and be very quick to react and extremely professional. Otherwise, what do you have to offer?

On the other hand, Hong Kong is a little city of 10 million people based on a British legal tradition, the Rule of Law. The laws are simple, few and very respected. In business, it’s not a jungle; everything is clear. And in the day-to-day, I have to admit there is very little shoplifting. The overall atmosphere is one of trust, sincerity and honesty.

Today, you carry around 50 women’s ready-to-wear and accessories brands in your boutiques. What are the major evolutions you observe?

The Hong Kong clientele is very sophisticated, she travels a lot, and she pays attention to what goes on in other countries. She really wants to stand out. In the last four years, many ‘affordable luxury’ brands came in, dramatically increasing the product offer and making competition more intense. And some players were not honest about pricing with regards to their real positioning — a dangerous practice when dealing with an honest public. So that trend has slowed down somewhat.

In any case, our goal is not to open 40 boutiques. We chose to associate with a premium British brand, Phase Eight. A lot of groups are expanding to other businesses like cosmetics, macaroons, etc. Hong Kong has become a global economic crossroads. To stand up to the competition and succeed, it’s important to know who you’re dealing with, have the right product at the right price in the right location, and especially have the right logistics.

Introducing small brands is complicated due to market penetration costs. Brands also have to present new products constantly, because clients are eager for new items and also because fixed costs are enormous and you won’t succeed by earning 80% of your turnover in three months. You have to perform throughout the entire year.

Now we’re seeing a real craze for everything South Korean or from the famous Korean Soft Power movement, which is part of K-pop (Korean pop music) and Korean TV series. Japan no longer follows this trend and China hasn’t caught on yet. Some brands have really taken off since they were worn by Korean singers or actors. I still remember the amazing popularity of the Saint Laurent lipstick (Rouge Pur Couture No. 52), simply because it was worn by an actress in a successful series. The result was an ‘out of stock’ situation around the world!

Upcoming Fédération events in Asia:

January

10-12: Mode in France Taipei trade show

14-16: Mode in France Tokyo trade show

March

18-20: Paris Forever Pavilion at the CHIC trade show in Shanghai

23-24: Mode in France prospecting mission in Hong Kong

July

Mode in France Taipei trade show

Mode in France Tokyo trade show

Mode in France prospecting mission in Seoul