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SINGAPORE: Luxury brands are expected to get some boost from the growth in Asia's tourism sector.
And observers say companies wishing to ride on this will need to up their game with better brands, services and competitive prices.
Rising consumer demand has led to better profits for retailers like FJ Benjamin.
The company made US$6.2 million (S$8.3 million) in profits for the financial year ended June.
That's a turn-around from losses of US$2 million (S$2.7 million) a year ago.
The firm says it has paid US$500,000 to acquire a 60 per cent stake in Arcangel - a design house by London-based Catherine Deane to tap into the growing market in China and the rest of Asia.
The Catherine Deane brand is currently sold in 45 locations and FJ Benjamin intends to double this number in three years.
Douglas Benjamin, CEO of F J Benjamin, said," Tourists will shop if your brand is in demand. It is very important to target countries where all these tourists are coming from and then do proper A&P and promotions and brand building in those countries. And once those people come here as tourists, they will buy those brands."
Some of the brands FJ Benjamin currently carries include GUESS and Gap.
With China leading the rebound, renowned global luxury brands have also upped their earnings estimates.
Designer bags brand Hermes has upped its 2010 targets from 5 per cent to about 10 to 12 per cent, after second quarter sales outperformed expectations.
But observers say Singapore will need to raise its game as it's lagging behind other fashion capitals in Asia.
One way is by boosting service standards.
Samuel Tan, Course manager of retail management at Temasek Polytechnic, said, "To build ourselves as an international brand hub, one of the very important things we need to do is to improve on the service standards here, more retailers will be attracted here and at the same time, shoppers will enjoy their shopping experience here in Singapore."
A May 2010 survey on global retailers by CB Richard Ellis showed only 39 per cent of the world's top retailers are in Singapore. This is lower compared with top ranked Hong Kong with 43 per cent and Beijing with 41 per cent.
Meanwhile, an April 28 survey released by Singapore Management University's Institute of excellence, service standards are improving only slightly.
Fashion and apparels rose 0.3 points on-year from 66.1 to 66.4 while the jewellery segment increased 0.2 points from 69.0 to 69.2.
Still, one bright spot that could prop up Singapore's position is its efficient tax regime - which observers say, have kept prices lower than in neighbouring countries. - CNA/fa
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