Maturing market

"China is the most exciting market for fashion right now," enthuses Michael Michalsky, the darling of the recent Berlin Fashion Week.

"The Chinese are really open to fashion, and let's face it, the future of the world lies in this region," he says as he reflects on his deal to develop a range of sportswear for the China Dongxiang Group.

The Michalsky label might not yet be in the same league as Karl Lagerfeld, Hugo Boss or Joop!, but its namesake has always been ahead of the pack. "I like to do things differently and I like to be the first," he says. "I was the first designer to move to Berlin and do major shows here even before it was really on the map. It's part of my own nature and the character of both my company and my brand."

Shifting focus

In these economically troubled times, thinking outside the box can make all the difference - and Michael Michalsky has broken with decades of fashion tradition by setting his sights on Beijing and Shanghai rather than Paris and Milan.

At the high-end of the industry, he's one of the first to have woken up to China's potential as more than a market for established western brands such as Louis Vuitton, Cartier and BMW.

Earlier this year, the New York Times stated the obvious when it reported that China is now the world's fastest-growing luxury market, with an estimated $7.6 billion in sales in 2008.

Michalsky, in the meantime, had cottoned on to a different, more significant growth - that of the domestic market. Although its love affair with imported luxury is still going strong, China is increasingly fed up being merely a production site for other countries and the home of cheap knock-offs. These days, it's keen to foster indigenous brands and to meet its consumer needs under its own steam.

"The domestic Chinese market is expanding rapidly," confirms René Lang, president of the Association of German Fashion and Textile Designers . "Until now, China has been known first and foremost as a supplier, but now it has greater spending power, despite the crisis, and there are some very well trained designers and fashion schools. But they are still in a phase where they tend to rely on foreign help expertise."

Enter Michalsky. After eleven years as Global Creative Director at Adidas, he founded his own label in 2006 and his 'Real Clothes for Real People' approach has done much to establish Berlin as an up and coming fashion capital where style reflects the street more than the catwalk. Nonetheless, the Michalsky label hasn't yet managed to turn a profit.

In that respect, it's in the same boat as many ailing brands. But while hard-up veteran French labels such as Lacroix are busy nursing their wounds and sulkily blaming bankruptcy on the global financial crisis, Michael Michalsky - like the brave young rookie he is - wasted no time identifying markets not feeling the pinch of recession quite so harshly. Traditional brands might turn their noses up at China, but where others see only a low-end market, the German designer sees real potential:

"The Dongxiang Group is very successful locally, and the company is now looking to expand internationally," he says. "To begin with, the line will only be available in China because that's where they have their own stores, but they're planning to expand across Asia and I don't see what's to stop them ending up in other markets futher afield."

"China is in a transitional phase right now, it's moving away from imported goods towards home-grown products," agrees René Lang. "There's a burgeoning desire for a more personal cultural identity attached to goods that have been specially produced for the Chinese market."

Hot on the heels of Jil Sander

In heading east, Michalsky is following in the footsteps of only one other German designer. In March, Jil Sander raised eyebrows from Madison Avenue to Avenue Montaigne when she teamed up with Japanese budget clothing retailer Uniqlo. The company sells $30 jeans and $15 parkas, and is one of the few companies still thriving despite Japan's recession.

"The challenge for me is to establish premium quality and democratically priced brand Uniqlo," she told reporters in Tokyo in spring.

Similarly, Michalsky showed that he's not too proud to take his talents wherever they're most wanted when he launched his Mitch & Co range for Tchibo, a German range of coffee shops that also sells clothing, household items, electronics and electrical appliances.

The collection flopped, but the tie-up helped make Michalsky a household name. Unlike many designers, he's just not that precious. As far as China is concerned, he shrugs off the qualms some of his colleagues might have about poor working conditions.

"I haven't yet been to any of the Dongxiang factories," he says. "I've been to the headquarters and it's a very modern company and very European in its thinking. In fact, the Chinese factories I've visited in their past when I was still with my former employer, were surprisingly modern and conditions were good. They were no different to places I've visited in Italy. I think conditions have improved a lot."

Image boost

René Lang says the same. "We need to get way from the idea of cheap China," he stresses. "Standards are changing fast and there's a growing interest in organic textiles, sustainability and better working conditions. The situation will inevitably improve the more money starts circulating in the market. China is trying to shed its bad image."

As a designer, Michalsky has often demonstrated a social conscience, referencing world affairs in his shows with comments on issues such as the hypocrisy of left-wing intellectuals, the tyranny of capitalism and the profligacy of Wall Street. But with the ink still drying on his latest deal, he's reluctant to consider the political or economic ramifications of his move into China.

"My message is simply that we are all living in one world and that's why I wanted to do something in this part of the globe," he sums up. "I understand that young people are influenced by the same things all over the world, and I think that's why I got the job."

Author: Jane Paulick

Editor: Neil King