Richemont held Shanghai Tang for 19 years — a Chinese luxury brand no Chinese buyer wanted

David Tang founded Shanghai Tang in Hong Kong in 1994 as a high-end tailor, then expanded it into 'China's first contemporary luxury brand' — cheongsam dresses, mandarin-collar shirts, and homeware sold in glossy boutiques. Richemont, the Swiss group behind Cartier and Montblanc, bought a majority stake in 1998, a year after Hong Kong's handover to China, and took full ownership around 2008. The bet was obvious: a billion Chinese consumers were about to get rich, and here was a luxury house with a Chinese identity already built.

The bet never paid. Shanghai Tang reached only 32 boutiques worldwide, and Richemont's own analysts conceded the brand 'has not been relevant either in terms of turnover or profit.' The 'East-meets-West' positioning was, as one analyst put it, 'rather confusing' — the aesthetic was Western enough to feel inauthentic to Chinese buyers, yet Chinese enough to read as exotic costume to Western ones. Richemont carried the operating losses for almost two decades.

On 30 June 2017, Richemont sold Shanghai Tang to Italian entrepreneur Alessandro Bastagli and a consortium of private investors. The terms were undisclosed, and Richemont stated the deal would have 'no material impact on its balance sheet, cash flow or results' — a polite admission that 19 years of ownership had produced nothing the group could measure. The irony was that China's luxury market had grown throughout: Chinese shoppers simply preferred the foreign labels Richemont already owned.