BOSS Opens The First Luxury Store In Sri Lanka
Spearheading its reliable suits into one of the fastest growing economies in the world.
BY Lestari Hairul | Jul 13, 2017 | Fashion
Pass through customs and immigration at Bandaranaike Airport, and on your way to the baggage carousel, you will see a curious sight. A mass of duty-free washing machines and other home appliances beckon on either side of your path, their respective salespersons smiling and at the ready.
At a dinner hosted by Hugo Boss and their local distributor in Sri Lanka, ABANS PLC, Tanaz Pestonjee explains that the duty-free shopping is for the benefit of Sri Lankans returning home from working abroad. Largely aid workers, they receive an allowance if they work overseas for at least six months and the first thing they do is to buy a washing machine. Pestonjee, Director of Abstract Lanka, which is one of the many companies under the ABANS empire, is the granddaughter of the matriarch Aban Pestonjee who started it all. In a way, the display of home appliances at the airport is a legacy of the senior Pestonjee who almost single-handedly revolutionised the industry in Sri Lanka.
Travelling down the roads of scorching Colombo, it is a landscape that is not unlike Singapore in the ’70s. Low, two- or three-storey buildings line the streets, the public transportation takes the form of tuk-tuks and the occasional belching bus. The country has lived through almost three decades of civil war, but away from the bloody recent past, is a beautiful land that is one of the fastest growing economies in the world. Being the oldest democracy in Asia, it was also the first non-white country within the colonies of Western Europe to achieve universal suffrage in 1931. The legacy of colonialism, a mix of the Dutch-Portuguese-British, is reflected in its old buildings. Housed in one, Arcade Independence Square, is the BOSS store, the first entrant into Sri Lanka’s luxury sector.
It is a move that Hugo Boss has done before. They were the first luxury brand to enter Cambodia back in early 2015, one of the pioneer brands in Vietnam and, with the store opening in Myanmar last month almost concurrently with the Colombo opening, are also the first menswear brand in a newly-open economy. We speak with Steven Lam, Managing Director of HUGO BOSS Southeast Asia.
Esquire: Why Sri Lanka?
Steven Lam: We found a great partner here, ABANS, and a great location, so I say the stars are aligned. Sometimes, you need these elements to come together to develop something beautiful like this. Having the intention, but not a retail space or a passionate and committed business partner, a trailblazer like them, would make it a challenge as well. And the same with us—we as a company are willing to try new things, new locations, new challenges, and so I guess it’s a perfect partnership, and that’s why it happened.
Esquire: What are the challenges of being the first?
Steven Lam: Real estate. In most new countries, the real estate will always centre on prestigious hotels. If you look around, you can imagine that one of my first choices would be near the Galle Face Hotel because this is the most special hotel in Sri Lanka; I think it’s one of the oldest. But you don’t want to be all by yourself. You want to have brands, you want to have the right restaurants, so we chose this location partly because of its heritage, but also because this is where all the embassies and the expatriates are. It’s one of the wealthiest neighbourhoods in Colombo. The other challenge that we faced was people. We find the best people in hotels, because usually, in a developing country, they are the first to interact with tourists and have a different way of dealing with them compared to those who are not exposed to foreigners. So, I tend to like to choose human resource that is tourism- or hotel-driven.
Esquire: Wasn’t Arcade Independence Square an asylum before?
Steven Lam: That’s right. Yes, it was an asylum, and then it became a parliament and a government house. It was also closed for a while. Our business partner rented the whole wing for 10 years. We met through a mutual friend. He basically came up to us, saying, “I’m very interested in BOSS. I’m a BOSS fan.” Most of our distributors or franchisees are BOSS fans. This first meeting took place almost two years ago. Eventually, we came by, had a look, and thought it was interesting. There are two iconic buildings in Sri Lanka that have been refurbished, which had a different use before. One is called the Dutch Hospital, and they turned it into a retail space that reminds me a lot of CHIJMES in Singapore. Then there is the Arcade Independence Square. We just thought it would be super cool to have a BOSS store here. This will be our second project where we combine our shopfit with the architecture of the building. The other one is in Omotesando, Japan.
Esquire: Has anything been changed from the building itself?
Steven Lam: It used to be an Apple store. If you notice, the fixtures are all free-standing. We are not allowed to bolt anything into the ground or the walls. We have to keep the ceilings open. We were not even allowed to move power points. But that’s the beauty of it; we have a lot of respect for the architecture. We had to work with what we had and basically built our shop around the architecture. In the current situation that we’re in, most of the brands are usually in a shopping mall and we end up looking very similar. So, I think this is a very special project for us.
Esquire: Being the first in the luxury sector here, do you foresee problems building a customer base?
Steven Lam: The beauty of BOSS and brands like Rolex and Mercedes is that we’re widely recognised internationally. We are the largest menswear brand, with a range that goes all the way from premium to luxury. We can be aspirational, and we can be extremely luxurious like our made-to-measure service. The same with Mercedes, the same with Rolex. When you first start working, you might buy a C-Class or a B-Class. When you do better in life and get a nice promotion, you buy yourself an E-Class. And as you grow older, you may venture into other car brands. But you will always think of Mercedes because I think there’s an attachment. We are one of the few brands where I guess you don’t really need a lot of education. That’s one reason why we are able to enter the market very quickly as well.
Esquire: What would the ratio of customer types be like?
Steven Lam: We imagine that 60 percent of business will come from locals, and 40 percent from tourists. The tourism numbers will surprise you, because, year after year, they are growing by 30 percent. The number one clients that come here are Indians, number two are the Chinese, and we are quite well-established in both markets. We don’t foresee a problem with the tourist business. For the locals, we have a first-mover advantage as well. Here, you only have two choices: you either go to a local tailor, and there are quite a few around, or you go to an international brand like Hugo Boss, and so I think we have that advantage over our competitors.
Esquire: Is there a difference in demographics, when comparing the different markets of the Southeast Asian region?
Steven Lam: I would say that in a country like Sri Lanka or even Cambodia, the demographics of the clients tend to be the top five to 10 percent, whereas in a developed market like Singapore, Hong Kong or even Malaysia, the market is much broader. You have the young working professionals who also demand that kind of quality, whereas in a market like this, there is still a lot of room for the middle class to learn to appreciate luxury products. I would say that they’re probably a bit more sophisticated in a country like Sri Lanka. And in fact, most of the guys, who are in that market segment, travel, so we don’t need to educate them. It is very important that we have the same message wherever we have a presence, whether it is Singapore, India, the UK, Germany or Sri Lanka.
This article was first published in the print edition of Esquire Singapore, June/July 2017.