British maternity retailer Seraphine excited by China opportunities
A famed British maternity retailer is set to crack the Chinese market and capitalise on a pending baby boom after the country's Communist government ditched its one child policy earlier this year.
Seraphine boss and founder Cecile Reinaud told the Press Association that her company is now in advanced talks with a regional partner that would help launch its clothing line in the Asian powerhouse.
"We are in advanced discussions so it's looking very promising," she said.
"That market, obviously, is changing very fast. But they key thing is that the second child policy has been passed since January, so people are really expecting a baby boom. So that works well for our industry."
When asked whether she was hoping for favourable post-Brexit trade deal with China as a result, Mr Reinaud said: "Yes, absolutely."
The maternity fashion line - which has been worn by the likes of the Duchess of Cambridge, Anne Hathaway and Angelina Jolie - exports about 70% of its goods to about 100 counties outside of the UK, with the US accounting for around 35% of its revenue, and Europe making up around a third.
But Ms Reinaud said she would not consider relocating her business outside of the UK in order to avoid potential tariffs after Brexit, adding that she benefits from the UK's relatively low corporate tax rate and a less bureaucratic business environment compared to her home country of France.
Profit last grew from £1.5 million to £2 million last year while sales jumped 11% to £15.5 million,
Seraphine is now targeting a further 30% jump in sales for 2017 to £20 million, in light of its international expansion plan and an "aggressive" marketing programme in the US.
The collapse of the pound since the Brexit vote has increased pressure on Seraphine's margins by raising the cost of imports.
But while Ms Reinaud does not expect that Brexit negotiations will result in new tariffs between the UK and EU, the business would likely adapt by hiking prices and focusing on other markets like Asia.
"If it was to happen we would need to raise - a bit - our prices, which is what we do in America.
"When we trade in America, prices are a bit higher to compensate for the fact that we are paying duty on sending products to the US .... and of course it would probably mean focusing more effort in new territories other than in Europe."
But Ms Reinaud says Seraphine - which has dresses ranging from around £40 to over £250 - provides a price range that will continue to attract customers.
"The reality is that if a product is £4 more - it's the price of a cup of coffee and she's not going to not have a nice dress because it's £4 more. I think we have room for manoeuvring, especially because when it affects the whole industry, everybody brings up their price."
She added: "You always do (lose customers) but I think we have some price elasticity. At the end of the day, we offer a very specific and unique product for a unique moment in the life of a woman."