CEO Talks: Andrew Keith on Resilience, Reinvention and Reading Chinese Consumers

LONDON — Andrew Keith may not be a conventional retail chief, but that’s a perk as his particular CV couldn’t be better suited to these unusual times.

Having grown up in Borneo, and traveled extensively with his family across South and Central Asia, India and Russia during the long summer holidays, the future president of Lane Crawford and Joyce developed valuable insight into the people and cultures he encountered during his peripatetic youth.

His professional path, while not as exotic, has also been unconventional. “I worked my way up from the shop floor. I was in buying and previous to that I was in design. I don’t have an MBA, and I don’t come from a legal background. I come from products, marketing and selling,” said Keith who, early in his career, had a job designing men’s sport jackets and suits for Marks & Spencer when they still manufactured clothing in England.

Today Keith oversees more than 20 Lane Crawford and Joyce stores. Here, he talks about navigating the retailer through the twin challenges of democracy protests in Hong Kong and COVID-19; the future of wholesale; China’s new creative talents, and the retailer’s 170th-anniversary celebrations, which began this week. The focus of those festivities, he said, is on the customer community, and on the store’s history of resilience and reinvention.

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WWD: How has it been running a luxury retail business against the backdrop of COVID-19 and the protests in Hong Kong?

Andrew Keith: Unlike anywhere else, the combined effect of COVID-19 and of the protests didn’t actually disrupt business in that we didn’t close any of the stores. We have been fully operational throughout, and we’ve been really focused on using social channels to stay connected with our customers.

We have a proprietary digital styling app that enables all of our personal stylists and our sales teams to stay connected with our customers in a very personal way. They’re doing their own mix-and-match, almost becoming influencers and stylists themselves, and communicating directly with customers. We’ve also stayed connected with customers by sending trunks and merchandise to their homes, with little videos in terms of what to wear and how to style. We’ve also been doing Zoom fashion calls and trunk shows with our customers.

We’ve been taking all of the precautions in the physical stores themselves. Everyone is wearing masks, the stores are cleaned on an hourly basis, everyone has their temperature checked before them come in, and we’re making sure that the safety of our teams is a prerequisite and our key focus. It’s been [18 months] of incredible learning. We’ve tried to be very creative about how we find solutions. The Hong Kong situation is unique, and it’s about us being resilient.

WWD: How was Golden Week in terms of sales?

A.K.: This year, we had the Mid-Autumn Festival and Golden Week at the same time, so it’s been an extended holiday period. I would say that in China, we’ve seen very positive growth and have been very encouraged by the customer interaction, customers coming into stores and the growth, overall, of the business. In Hong Kong, it was more of a Golden Weekend, if you like, and clearly we don’t have the inbound tourism that we’ve had historically during this period. But what we have seen is increased engagement with local customers. People have been coming back into the stores, and we had a strong trading weekend. I have to caveat that with the fact that this time last year we were quite disrupted in Hong Kong, because we were in the throes of disruption.

WWD: Can you talk about the future of Hong Kong? Not too long ago, the region was a money-spinner for luxury brands. Will those days ever return?

A.K.: There is no question that the Hong Kong market is going through the process of resizing, and certainly in the short- to mid-term it doesn’t look like the levels of inbound tourism we have seen historically are going to come back to the figures that they were. Having said that we, as a business, are celebrating our 170th year this year. That’s 170 years of being in Hong Kong. That is generations of connecting with the local Hong Kong customers, and unlike many other luxury brands, which had seen Hong Kong as an opportunity to pick up traveling business from Mainland customers, our focus, our Hong Kong business, has always been with the local customers.

We continue to be very focused on strengthening the relationships with that customer, we continue to bring newness and excitement into the market. Hong Kong is still a market of seven-and-a-half million very affluent, global and well-traveled residents. It’s not a market that is insubstantial, but a market where we continue to have a very loyal customer base. For us, there are a lot of opportunities still in Hong Kong as brands start to reassess their position within the market. As an omnichannel, wholesale model, we present possibilities and opportunities for them. As a model, Lane Crawford has been built to be flexible and adaptable to the changing retail landscape. So it’s an opportunity for us.

The atrium of the Lane Crawford IFC flagship store, Hong Kong, during the 170th anniversary celebrations. Courtesy of Lane Crawford

WWD: Are you concerned that the trouble Hong Kong has been facing will lead to a creative or business brain drain from the region?

A.K.: From what we’ve been experiencing, and because I’ve been continuing to add new talent to the team, I think that generally people see Greater China as the market of the future. It’s a market that is growing, one that has a young and energized customer, one which is adapting very quickly — and that’s exciting. There’s a lot happening there. Global talents see China and Greater China as an opportunity.

From a creative perspective, we’re also seeing Chinese customers get behind young Chinese talents. There’s a real pride in the new generation of talent. Many of them are overseas-educated and are coming back to China bringing new ideas, new ways of thinking and using Chinese resources and manufacturing capabilities to bring their vision to life. They’re being supported by the customers and by the community in China. I don’t think there is a risk of a brain drain. I think what you’re going to see is Chinese creativity showing up globally, China’s talent going out more. You can see that happening around the world.

I think what’s really exciting, when I work with young talents in China, when I speak to them and they share their vision of the world, their idea of success is not necessarily about global domination and about being recognized in New York or in London. Their idea of success is that they can build incredibly robust businesses, and just be focused on China. And I think that is a really interesting indication of how the mind-set is shifting. You’ve got a market that is growing, you add a dynamic customer who is young and digitally engaged and who is supporting the local talent. For this generation of designers that is success — being able to grow their businesses locally.

WWD: Lane Crawford has more than 20 stores across Hong Kong and Mainland China. How do you speak to such a broad, diverse audience, especially in times of crisis like these?

A.K.: Each of our stores has a fashion profile that reflects the tastes and the lifestyles within those cities. We buy according to that. In Beijing, customers appreciate a timelessness to fashion, luxury and craftsmanship. In Shanghai, they are a little bit more open to avant-garde, while Chengdu is a very young and dynamic city, where they really appreciate contemporary brands. The dynamics are different in each city, so from our perspective, that creates opportunities to tailor the assortments in pretty dynamic ways.

We buy everything that is in our stores, and we don’t have any concessions, so we can flex things very quickly [and ensure that our offer] corresponds to the trends that we’re seeing and how customers are changing in terms of their needs. It’s great that we can have this interaction and this communication. That’s another benefit of having digital: You get an immediate response that you can act upon.

WWD: How did your different customer bases respond once lockdown began to lift earlier this year?

A.K.: The way our customers came back into stores was really quite remarkable. I think what was driving them was reconnecting on a human level, reengaging with relationships that they have with our stylists and our teams. That’s something they were really craving during lockdown as much as purchasing and getting into the new season and getting back into fashion. Over the summer, one of our managers in Shanghai said to me: “The new luxury is about love and empathy.” That’s what the customers have really been feeling. It’s that sense of what’s important. As we saw customers coming out of lockdown, it was that sense of the importance of human connection that was driving them.

We also experienced a number of exceptional transactions, of a size that we had never seen before in China. That was due to a couple of societal trends: When everyone was meeting with their friends and family again, there was this pressure to look as good as you possibly could, to show that you had spent lockdown eating healthily and exercising. The whole idea of “reunion dressing” was massive, so a lot of people were buying new pieces so when they all got back together, they would be looking great. I think there was also an element of anti-COVID-19 shopping, a response to fight the virus through shopping.

The growth in China has continued with that strong momentum. China has been delivering according to plan: We’re seeing great growth in our fashion businesses, in our lifestyle businesses, and beauty is growing very quickly, too. We’re reallocating more merchandise to China, doing trunk shows and designers doing personal appearances online. Previously in China, everyone loved to meet the designers. Now, they are getting together through Zoom. That excitement about new seasons, the anticipation of being able to have a Zoom call with a designer, is really there.

WWD: After lockdown lifted earlier this year, you surveyed customers about how they were feeling. What did you discover?

A.K.: More than 85 percent of our customers said that COVID-19 has been having an impact in terms of how they are living their lives. They are consciously making adaptations to how they live. There is more awareness of health and wellness. They are spending more time with family, spending more time cooking at home. Across the region there are these macro trends that are happening from a customer perspective.

We also noted the importance of physical retail, particularly in China. The feedback was: “We want to come back into stores, we want to feel, to touch, to be in an immersive experience. Yes, we love the connectivity, we love the fact that you’re engaging with us on WeChat, we love that the sales teams are still connected with us, but we really value that physical experience.”

WWD: On that note, can you talk about your plans for the 170th anniversary?

A.K.: The Lane Crawford story is inextricably linked to the Hong Kong story. It’s one of entrepreneurial spirit, of resilience, of reinvention. We’ve been able to look at the future and that is something that we feel very proud about. We also recognized that the brand would not be here if it weren’t for the generations of customers, brand partners and creatives who have made that come alive. The anniversary is really about us sharing the stories that we’ve created over that time.

Clearly, the future of retail and luxury is one where digital and physical are going to continue to fuse, so a fair amount of what we’ve been doing will be immersing people both physically and digitally in the stories that we’d like to share. We’re working with our brand partners on exclusive products and we’re highlighting some of the amazing personal journeys that people have had with Lane Crawford over the time. At a time where the world is feeling fragmented and possibly a bit isolated, it’s a great chance for us to celebrate how human creativity and human resilience can really connect people.

WWD: What are your thoughts about the spring/summer 2021 season with its phy-gital formats, digital showrooms, and restrictions on international travel?

A.K.: I think the buyers have been quite challenged in terms of being in front of their screens for such extended lengths of time, and particularly with the different time zones that we had to deal with. So the brands that have been thoughtful and considerate and have done the pre-work certainly are the ones that we have really responded to. Some brands have taken this as an opportunity to review how they message, how they want to communicate.

Marine Serre made a fantastic film, and had this extraordinary kind of AI approach to her messaging and her vision of the future, which was very evocative and very emotional, even though it was in a film format. What Jonathan Anderson has done both with J.W. Anderson and Loewe [sending boxes to buyers and press filled with mood board inspirations] — to have that in my office, that huge amazing wallpaper and the glue and the scissors. The whole thing about how to tell that story around the inspiration and to encourage us to become part of that creative process, I think that was really remarkable.

In addition, because we’re working in this digital wave, more people have been involved in the buying process. It has enabled us to get the personal stylists in, as well as some of the marketing teams and some of the more junior members of the staff, who would never have traveled to Paris, but who are now getting involved in the buying process. We’re all learning as we go through this.

WWD: Have you downsized your spring 2021 buy at all?

A.K.: We reduced the buying in areas where we felt the product wasn’t there. I see now, more than ever, that it’s really about making sure you buy really compelling products. As a consequence of that, we actually increased some of our purchases. We have a strategy where we really buy door-by-door. Each store has its own buying strategy and its own OTB. Clearly, that has an impact in terms of where we’re actually placing our budgets as well.

WWD: Why did you decide to endorse the initiative, led by Dries Van Noten, to slow down the fashion cycle, align deliveries to the seasons and reduce markdowns?

A.K.: I don’t think that we have a future in the industry if we don’t change. I think that we have gotten to a level of scale of manufacture, a level of discount, of customer disengagement, that is not sustainable for us as an industry. I don’t think there is an alternative, unless we address it and action things and change and look at how we are producing, selling and engaging with our customers in a much more responsible and sustainable way. I think, however, that this has to come from the businesses, and it has to be an approach that each business can manage. It can’t be a one-size-fits-all, but I think that as an industry, we all feel that this is the right way to go.

WWD: How would you describe your management style, and what kind of environment do you want to foster at the retailer?

A.K.: I was brought up in Borneo. Every year we would go back to the U.K. with my parents, and we would travel overland to get back home. We had two months of annual leave, and one month of that would be spent traveling. We went across China in 1979, which was the year that China opened. Another trip was through India and Afghanistan, another was on the Trans-Siberian Railway. Wherever possible, we never flew.

I’ve had, from a really young age, a curiosity and an intrigue about the world, and most importantly I think about people. I have always believed in trying to create an environment where people can be their best, to shine as brightly as they possibly can, and with as much diversity as possible.

We are a Hong Kong business, we are based in Greater China, but the diversity that we have in the team is quite unique. I try to be open to newness and to creativity and to people shining their brightest. I think that increasingly, my leadership is not about me as a leader, it’s more about how do you help everybody else to be a leader, how do you get people to feel the same level of passion and responsibility that I have for the brand.

WWD: Who would you consider to be your mentors?

A.K.: I’ve been so lucky to have had, through my career, people who have supported me and encouraged me to take the next step. With Lane Crawford, having the Woo family there has been amazing. The working leadership and the support that Jennifer Woo [chairman and chief executive officer of The Lane Crawford Joyce Group] has provided is extraordinary. And I think that the trust that we have between us and also with her father [Peter Woo, owner of the Lane Crawford Joyce Group and executive chairman of its parent Wheelock Holdings] has been great in terms of business support and being able to provide opportunities.

One of my earliest jobs was designing men’s sport jackets and suits for Marks & Spencer, and I worked with this extraordinary guy in a factory in Sunderland [England] in the early Nineties. He was a major craftsman. The level of passion and the commitment he had about products was something that was so inspiring, and he could tell you every single technical detail, from wool to the correct pattern to use. It was that kind of level of craftsmanship and care.

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