“It’s good to come here and have a feeling of optimism ” Timothy King told the Journal.
The managing director for Richemont Luxury Asia Pacific Ltd. which retails luxury brand Dunhill noted a returning atmosphere of opportunity in Guam when he visited on June 11.
“I’ve been coming here for five years and it’s been disaster after disaster. For the last six months there has been good news out of Guam. It’s good to come and get a feeling that things are happening ” he said.
King was on Guam for two days to visit retail outlets and met with DFS Guam and Tumon Sands Plaza personnel. Dunhill retails at the DFS Galleria and the DFS store at the Guam International Airport and has its own store in Tumon Sands. Dunhill also hosted a June 11 dinner at the Hyatt Regency Guam attended by about 80 paying guests.
Despite the upward trend King said the hospitality industry still had room for improvement. “There are hotels which are empty which one would hope would be filled.”
Approved destination status from China for the Mariana Islands particularly the Northern Mariana Islands is expected this summer. The anticipated wave of Chinese tourists contributed to Dunhill’s estimation that sales performance would return to previously high levels.
The Mariana Islands presently provides between 3% and 4% of Asia-Pacific business for Dunhill. King told the Journal in the ‘90s sales were 1- and-1/2 times higher.
He said although there was a small local market Dunhill sales in the region were predominantly tourist-related.
The company was following efforts in the region to attract Chinese tourists. Dunhill entered the market in China in 1993 and now has 57 stores in 35 cities. “We are the leading luxury brand in China where we are seen as a male brand.” While Japan is the leading market for Dunhill King said its Chinese business was “getting to be increasingly important.”
Hong Kong has become a travel destination for the Chinese. “The Hong Kong business as a result is growing as well ” King said. Chinese tourist numbers were increasing in South east Asia he said. “In Thailand they take cheap package tours. There is not a lot of time and they are pushed to trinket shops.”
Dunhill retails through DFS in the Northern Mariana Islands both at Saipan International Airport and at the DFS Galleria in Garapan. King said he thought Saipan destination would prove attractive to Chinese. “Because of the distance it will be viewed as more exotic and will attract people who have been to other nearby destinations.” He said he thought the Mariana Islands would also appeal to the high-end Chinese traveler. “It will be very good for Saipan.”
King said he could also understand the appeal of Tinian with the Tinian Dynasty Hotel & Casino offering casino gaming to the China market. Macao he said was enjoying a boom related to its casino offerings. Casino gaming he said could be one of a package of activities possibly appealing to some members of a family. “It also comes down to how you market it.”
Despite its firm presence in China and throughout Asia the Japan market has proved enduring for Dunhill and its leading customer base. “The Japanese started the trend for Asia. They have always been interested in Dunhill’s heritage and its quality. They like to hear the history of the companies and brands they buy.”
During the economic downturn Dunhill had seen subdued sales in Japan. The company’s 35 stores were doing well in Japan King said where 80% had been renovated with its new décor and newly introduced products performed highly.
King said Richemont understood the appeal of the brand was a combination of its history and quality. “We believe we’ve got a strong heritage. We need to be able to show people we are not a mass-produced product.” Craftsmen hand-finish goods King said and Dunhill has a high level of quality control. “We discard a lot of product if it’s not up to our required standard so the consumer can be pleased and proud of the product.”
Similarly he said “With our polo shirts we use Egyptian cotton — the best cotton you can have. It is mercerized which helps the feel of the garment.”
Although limited editions and antique items could be found on Internet auction sites Dunhill preferred traditional methods of retailing King said. “We want our customers to come into the stores and touch the product.”
The company redesigned its stores with gratifying results. King said “We have given the stores a look that is Victorian and masculine with rich red leather countertops and brass bumpers. It is male and has a warm feeling. We believe we’ve been successful in getting that message across. It has been proven saleswise. When we covert stores sales increase. It shows the product better and welcomes the customer better.”
Dunhill had worked to reposition the brand worldwide in the last 2- and-1/2 years he said. “It was not clear what Dunhill stood for. We are first of all a men’s brand concentrating on accessories and gifts. It’s clear we are making products consumed by men.”
However he said 40% of customers were female. Women purchased Dunhill as gifts but also for themselves. King said pens smaller lighters cufflinks leather wallets business-card holders and tote and weekend bags were purchased by women for personal use.
Despite the popularity of cotton and silk polo shirts King said “We were never a men’s wear brand it is part of the range.”
In the U.K. the brand began in 1893. Alfred Dunhill began diversifying from riding accessories into leather clothing for the emerging automobile market branching into other products such as pipes and pipe tobacco. “Between the two [world] wars Dunhill was selling a quarter of a million pipes a year ” King said. In the ‘30s Dunhill began selling jewelry pens watches and the lighters it is well known for in the U.K. A perceived association that Dunhill would prefer to lose is the linkage with Dunhill cigarettes. The cigarette license now owned by British American Tobacco Group was sold in the ‘70s although Richemont still retains shares in British American Tobacco. “People confuse the two ” King said citing Korea as a location where cigarettes performed well.
Although understood as a conservative brand with leather goods Dunhill had also introduced Sidecar Sidecar Amber and D-eight more casual and lighter looking ranges that combined paler leathers and canvas designed to appeal to a wider market. “We need to maintain our existing customer base and also encourage new people into the brand ” he said.
The company had also refocused on its tourism sector. King said “We neglected the travel retail market for about four years. We felt we were over-distributed and cut that back. Now we are trying to focus our offering rather than being side by side with other products. We are targeting small boutiques in airports or small boutiques downtown. We don’t want to be mass-merchandized — a Dunhill wallet next to five other wallets.”
Dunhill trains staff marketing and selling its products aiming to increase product knowledge and presentation and the pleasure of the purchasing experience. King said Dunhill would look to improved performance before expanding in the Mariana Islands. “We can do better out of our existing stores ” he said. DFS sold a targeted range of Dunhill he said. “They take what we regard as best sellers. We also like to show the consumer there is more to the brand.”
Richard Hawes president of Gemkell Corp. which does business as Dunhill Boutique as of March 1 said the Dunhill store in Tumon Sands additionally carried items such as costume jewelry and blazers. “We have the full range in our store ” Hawes said and the retailer will introduce other items such as a range of shoes and sunglasses.
He said the LeoPalace Resort carried Dunhill items. “There is some representation. It’s small but it’s growing.” He said appropriate sales outlets in Guam were limited. “There are not that many luxury locations to sell from.” Hawes said Gemkell and Dunhill would consider expanding at the right time. “We might want to have another location in Saipan — because of the China market. I wouldn’t rule it out.”
Richemont formed in 1988 also represents include Cartier Van Cleef & Arpels Piaget Jaeger-LeCoultre and Montblanc. Group sales for fiscal 2003 as at end March 2003 were $2 860.17 million with operating profits of $250.84 million. Dunhill has 158 outlets worldwide 85 of which are franchised and 73 directly owned.
A British national whose father was stationed overseas in the Army King grew up overseas. Although educated in the U.K. he has spent 27 years in Asia. He was with Moet Hennessy for 15 years as an agent and distributor and has spent nine years with Richemont as general manager in Taiwan director for Hong Kong and China appointed to his present position in 2000. He enjoys representing Dunhill and the change from wholesaling. “I concentrate more on retail and presentations to the direct end user.” As an additional benefit he said “You drink less in the luxury goods business.” MBJ
