Have you tried Charles and Keith?

Founded in Singapore in 1996, Charles & Keith is a fast-fashion retailer of high-quality, stylish footwear and accessories including bags, eyewear and costume jewellery catered to modern Asian women. The brand is recognised for its curated collections of relevant fashion designs available at affordable and accessible price points.

A lifestyle brand that embraces a culture of innovation, the brand has established a presence in prominent fashion cities such as Seoul, Shanghai and Dubai. The brand has also begun its foray into locations such as Macau’s The Venetian and pop-up stores in Galeries Lafayette in Paris in the past three years. In the last quarter of 2018, it launched an e-commerce hub in the UK as its first push into the European market. Today, Charles & Keith continues to inspire and excite with its experimental and unparalleled designs.

Within a short 24 years of inception, it is operating more than 600 stores with over 5,000 employees across Asia-Pacific, the Middle East, Europe, Latin America and Africa.

Starting out as a ladies footwear store in Singapore’s Amara Shopping Centre in 1996, brothers Charles and Keith Wong ran the store just like any other shoe store – procuring China- and Malaysia-made shoes from the same wholesalers as their competitors and then retailing them in-store. However, just after a few months of running the business, they quickly observed that while selling wholesale shoes provided a cost advantage, the lack of uniqueness meant limited growth.

This made them realise the potential of designing their own in-house products and creating a brand that consumers could identify with – leading to the creation of the Charles & Keith brand.

The brothers opted to design their own shoes while selling them at affordable prices. Keith was responsible for designing the shoes while Charles managed sales. The brothers also made the business cost-efficient by buying directly from manufacturers instead of wholesalers. To retain the exclusivity of their products, the brothers ensured that these manufacturers would not produce and sell their shoes to other retailers. By 2000 and within just 4 years, all its products were designed in-house. As the business grew, the company cut out the middleman and began working directly with production factories.

The brand also strategically planned and rapidly executed its global expansion strategy. In 1998, just 2 years after its store opening, it began its international operations by opening its first overseas store in Indonesia. In 2001, it opened its second overseas outlet in the Philippines. In 2004, Charles & Keith started expanding into the Middle East: first with Dubai, followed by Bahrain, Oman and Saudi Arabia. By 2008, Charles & Keith was already gaining revenue of USD 97 million, and this was expected to grow by 30% for the next 5 years before its acquisition.

The company’s big break-through came in 2011. Amidst offerings from various private equity funds and high-net worth investors, the brand sold a 20% stake in the company for more than USD 23.5 million to L Capital Asia (later change name to L Catterton Asia), a private equity group owned primarily by French luxury conglomerate LVMH Group and Groupe Arnault, the private holding company of Bernard Arnault, LVMH’s chairman and CEO. Founded in 2001, L Catterton Asia is currently a USD 70 billion luxury conglomerate managing brands such as Christian Dior and Bulgari, with a recent leadership mandate to invest in “affordable luxury” below the price points of LVMH’s brands. The deal valued Charles & Keith at almost USD 158 million. When this sale was completed, the world has started to take notice of Charles & Keith.

LVMH has helped the company expand into the vast Chinese market where it now runs 95 outlets with plans to add 30 to 50 stores a year for the next few years. With more than 500 stores across Asia-Pacific, Europe and the Middle East today, Charles & Keith is looking to conquer China, the United States and Western Europe to become a global aspirational fashion brand by utilizing the expertise of L Catterton Asia and their sponsors.

Today, it is well-known among fashion-conscious shoppers for their distinctive designs and quick in-season turnaround that offers 20 – 30 new designs in stores every week. The brand produces an average of 1,000 new designs each year – over 750 footwear designs and over 300 bags and accessories designs. Charles & Keith has expanded its product range to also include bag, belts, shades, tech accessories and bracelets, evolving from a footwear brand to a lifestyle brand. The group has also created Pedro, a line of men’s and women’s footwear and accessories. Today, Pedro operates 100 stores across Asia Pacific, Middle East and China.

The company has received several awards including the Singapore Retailers Association’s Excellent Service Award 2002 and the Enterprise Award at the Singapore Business Awards 2008.

The brand founder and Managing Director of the brand, Charles Wong has also been recognised with numerous honors, including the ASEAN Youth Award 2005 by the National Youth Council, Entrepreneur of the Year 2008 by the Rotary Club and the Association of Small and Medium Enterprises, Entrepreneurship Award 2012 by the Spirit of Enterprise, and the Young Achiever Award 2013 by the Business China.

Charles & Keith is definitely a classic example of how an Asian brand can become successful in the region and globally, by disassociating itself with low cost and instead adhering to brand building principles and focusing on carving a unique brand identity. It is indeed impressive how Charles & Keith has managed to transform from a single shoe store in the Singapore heartlands to a global fast fashion company located in several fashion cities.

One of the secrets behind its success is its strong delivery system supporting a clear brand promise, and its relentless commitment to innovation. By clearly defining its brand promise to provide high quality, stylish and affordable fashion at affordable prices, and by running a robust and efficient supply chain to produce its footwear, bags and accessories, the brand has created an environment where it continually exceeds customers’ expectations. Building and sustaining a brand that is relevant and one that resonates with the customer base is one of the most difficult aspects of building a strong brand today. Charles & Keith, with its presence in diverse markets, has managed to hold up well to this challenge of building a relevant and resonant brand personality.

There are indeed many opportunities that Charles & Keith can leverage in order to reach its goal of becoming the most admired fashion company. In particular, the company plans to focus on growing the brand internationally and expanding online sales. With its commitment to innovation, culture of design and proven consistent financial growth in the past 22 years, it is no doubt that the Singaporean fast fashion retail brand is on the right path to global success.

The next branding leap for the brand would be to venture into the luxury space. One of the true marks of a successful luxury brand is to have consumers buy into the entire brand experience and not just the product itself. With the sale of a 20% stake to luxury behemoth LVMH and the opportunity to tap into LVMH’s vast experience and knowledge in luxury, it will be exciting to see how Charles & Keith would plan its foray into luxury in the next few years.

Check out my related post: How can retailers compete with Amazon?

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