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China Xiniya Fashion to open three flagship stores
Aug '11
China Xiniya Fashion Limited, announced the opening of three flagship stores. The three new stores include a 250-square meter (2,690 square feet) store in Zun Yi, Guizhou Province; a 490-square meter (5,270 square feet) store in Harbin, Heilongjiang Province and a 600-square meter (6,450 square feet) store in Chengdu, Sichuan Province. These three cities are Tier 2 cities which have had higher GDP growth rates compared to Tier 1 cities, such as Beijing, based on 2010 figures.

Located in southwest China, Zun Yi is the second largest city in Guizhou Province, with a population of 6.1 million. In 2010, GDP grew at 14.7%, outpacing Beijing's GDP growth of 10.2% in the same year. Retail sales of consumer goods grew at 19.8% in 2010. Disposable income grew at 10.7% in 2010.

Harbin is the capital city of Heilongjiang Province, which is located in northeast China. Harbin's population is approximately 10.6 million. GDP grew at 14.0% in 2010 while retail sales of consumer goods grew at 18.8% in 2010. Disposable income grew at 10.5% in 2010. Chengdu is the capital city of Sichuan Province, which is located in southwest China, neighboring Tibet. In 2010, Chengdu had a population of approximately 14.0 million, GDP growth of 15% and retail sales of consumer goods growth of 18.8%. Disposable income grew at 11.7% in 2010.

The opening of these new flagships stores by Xiniya's distributors in July complements Xiniya's existing company-owned flagship store in Jinjiang, Fujian Province where the corporate headquarters is located. The additional flagship stores will further solidify the brand equity that Xiniya has already created in these markets and enable more targeted sales and marketing efforts in these cities and surrounding regions.

The brand equity benefits of flagship stores are expected to be beyond simply single-store investment and returns, as these stores enhance the attractiveness of the brand perceived by potential distributors / retailers during recruitment and business development. They also serve as a model store for operators to follow as examples. In addition, the new flagships should enhance retail sales for stores within their provinces. As at June 30, 2011, Xiniya already had 41 authorized retail stores in Guizhou Province, 69 authorized retail stores in Heilongjiang Province and 25 authorized retail stores in Sichuan Province. Guizhou, Heilongjiang and Sichuan provinces contributed approximately 9% of Xiniya's total sales in the first half of 2011.

"We are excited to have three new flagship stores located in high-profile locations that will strengthen Xiniya's brand awareness with our customers and distributors and in other business development activities," said Qiming Xu, Chairman and Chief Executive Officer. "Xiniya supported the store openings with marketing activities including prospective retailers' recruitment activities, fashion shows and grand opening ceremonies such as ribbon cutting,traditional lion dances and fireworks displays. The receptions on the opening days were a success with many customers attending the events."

The floor plan and store design of the three new flagship stores will serve as model store plans for other new stores and flagships that will be opened in the future. Flagship stores are generally three to nine times larger than typical retail stores. Distributors in other provinces are actively looking for suitable sites to open more flagship stores. Xiniya is responsible for the store renovations for these three stores, which are estimated to cost a total of RMB5 million.

China Xiniya Fashion Limited

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