Retail in Asia had the pleasure to interview Ewan Venters, the CEO of Fortnum & Mason, while visiting Hong Kong to plan the opening at K11 MUSEA scheduled by the end of November.
Fortnum & Mason is a renowned British food and lifestyle brand that sells gifts such as hampers, wines and spirits, teas and coffees, and many more.
RiA: What does Fortnum & Mason stand for in Asia right now?
Ewan: The heart of the brand is in the business of pleasure, so we are the business making people feel happy. We deliver pleasure through our experiences, through our services, and ultimately, through our products. We want people to be buying, consuming, and buying again. Therefore, for both in the UK and in Asia, they are experience houses. We have a real desire for our product in two ways.
One is through gifting and the other one is through, of course, self-consumption. When people get to try our Countess Grey tea and learn that it is like Earl Grey but with orange blossom rather than bergamot. They fall in love with it, then they come back and buy again.
We have extensive experience in Asia. We operated in Japan for the last 47 years with our partnership with Mitsukoshi Isetan. We operate with Shinsegae in Seoul. Most recently, the last 5 years, we have been in partnership with Lane Crawford in Hong Hong.
That counts a lot about the consumers in Asia. The consumer, frankly, is a discerning customer who cares about quality, who cares about taste, authenticity, and trust. People have a high degree of trust in our brand. Those are all qualities that actually are probably consistent with most of the world, but are very important here.
In Hong Kong, there is a very strong trading history with Lane Crawford, our partner, whom we will continue to work with in the future once we open our new flagship destination store at K11 MUSEA.
RiA: How is your assortment of products in Asia different from the one in the UK?
Ewan: Well, ultimately, we tailor the assortment based on the market, but also the size of the stores. The assortment in K11 MUSEA will be an edit because it is a smaller location. That said, 7,000 square feet over two floors with upper floor dedicated to the restaurant and bar and the ground floor being the main arena.
We will be concentrating on tea, biscuits, preserves, chocolate, and a range of savoury food, including an extended range of wines and champagnes and spirits.
RiA: How is it different from the assortment in Lane Crawford?
Ewan: Significantly bigger. The categories that we will trade in our Hong Kong shop will cover a very similar range to what we have in London. The number of categories will ultimately be smaller because it’s a smaller space: we will not be offering, for example, fresh meat counter, smoked salmon counter, or caviar in the same quantity as we do in London, but we will have our famous smoked salmon and caviar available over here in Hong Kong.
And we will not have perfumery, ladies accessories & menswear & grooming, as we have in our London flagship.
The range would be significantly larger than what has been in Lane Crawford and I think that is very exciting.
RiA: As you picked K11 MUSEA, known as the Silicon Valley of Culture, how did the two identities come together?
Ewan: We have a very strong partnership in Hong Kong with the Big Cat Group, who represents Jamie Oliver in this area and a number of other licensees. We have been working with the Big Cat Group now for a few years, developing our understanding of the territory. They are extremely strong market specialists. William Lyon, who is the CEO of that business, identified the opportunity with New World Development.
It is really thanks to Will that we have this opportunity and then we met with Adrian Cheng and with his own team. Their pursuit in K11 MUSEA is to identify as many brands as possible that have or do not have a presence or a strong presence in this part of the world and they really firmly have Fortnum’s in their sights as being one of those brands.
They are equally confident because of the trade that we are doing in Lane Crawford, they can see the commercial opportunity. What makes K11 MUSEA different to other shopping destinations is that there is really a dynamic mix of experiences, so classic shopping, museums, cinema, theatre, art, etc.
I truly believe this could be one of the legendary retail landmarks of the world, unlike anything we have seen before and we have just been part of it.
RiA: As you told us about your assortment, which one is your best seller in the UK? Which one, if you could disclose, in Hong Kong?
Ewan: It is interesting. The best-selling line in the company is Royal Blend tea, which is a black tea that Edward the 7th commissioned Fortnum to create when he was on the throne. That is definitely our number one seller.
As for category, in Hong Kong, biscuits have actually outsold tea up until now. The fact is that to sell tea with authority, you need to be doing a lot of tasting and experimentation, etc. which we do some in Lane Crawford, but because you are in the middle of a fashion store, it is harder to do that. But, of course, with the restaurant destination in Hong Kong now, people are going to experience all of the teas. I think that would lead to a much stronger conversion of tea in the retail store. Ultimately, tea would be the number one.
RiA: I think the big news for HK will be the restaurant, isn’t it?
Ewan: In K11, we will have the upper floor as a destination restaurant serving lunch, afternoon tea, high tea, cocktails, and then dinner. The space will be fully branded and fully operated by Fortnum & Mason. This is a fully run site by our team.
We have a really healthy mix of employees from the London business, who are transferring to work here because they are so excited by the prospect of working in Asia and working in Hong Kong.
I think culturally, for our brand, it is very important that we get a good core of the team, who understand the brand fully, and have been fully immersed with the brand for many years, and then you blend that with newly recruited people. We are creating around 90 new jobs.
RiA: Can you share more about the retail concept?
Ewan: It is two floors. The ground floor is focused on food and food accessories, so it would also be the best of our chinaware, teawear, and tea pots, glass tea pots, and so on. And within that there would be a number of, yet to be revealed, exclusives for Hong Kong.
What I think is really charming from where we are in the design process is the seamless integration of the restaurant even though it is on the upper floor. We want the building to feel like it is seamless, people can just transfer from one space to another space, and from that space to that space.
RiA: Any other plan for Asian expansion?
Ewan: I think this is the destination gateway development for Fortnum. There is no direct expansion plan as a consequence of this. I think what we really hope would happen is that people from mainland China, from other parts of Asia, would come to experience Fortnum’s in Hong Kong if they cannot get to London. If they are superfans, they would want to go to London and Hong Kong. So I am pretty confident about making this investment at the scale that we are, with a substantial site in, what I think is going to be the most talked about, retail development in the world. That is a big statement and I think building that business over the next few years is the absolute number one priority and focus. It is very interesting.
RiA: As you talked about cultural evolution, what type of different customer profile segments are you expecting to get at K11 MUSEA?
Ewan: The truth is we are open to everyone, but we really appeal to the curious. Because buying teas in Fortnum, you are not just buying a random brand.
It is an experience. It has good quality and it is properly priced. Therefore, people would only find that appealing if they are curious…if they want to understand; ‘why does it cost this price and why is it presented this way or why it has certain size of tea leaves’…it’s because it gives you the best quality and fusion which gives you a nice cup of tea.
I think that the curious Asian consumer will fall in love with Fortnum’s. We have seen in Lane Crawford, over the last five years, the number of Mainland Chinese consumers who have done their research before coming to Hong Kong to shop. They are coming into Lane Crawford and asking directly where is Fortnum & Mason and we know this data. We know that is happening in Lane Crawford. The penetration of non-Hong Kong residents that go into Lane Crawford and ask for Fortnum’s is extremely high.
I also think we would meet the needs of the Hong Kong citizens, both on the Island but certainly on Kowloon who will seek us out as part of their lifestyle.