Buffett’s Endorsement Of Trands, Suitmaker For China’s Government Elite, Gives Small Clothing Brand International Notoriety
Warren Buffett’s interest in China as an investment destination is well known, and his words of praise for (or investments in) the occasional Chinese company seems to have the effect of boosting that company’s visibility abroad virtually overnight. H is company’s $230 million investment in Chinese electric and hybrid automaker BYD has elevated what was only a few years ago a fledgling battery maker into a brand which is set to enter the US market as early as next year. So for little-known (even in China) Chinese menswear designer Trands, Buffett’s endorsement of his newest Chinese-brand-of-the-moment is definitely exciting news — especially because their stocks have risen 70% since the release of a video in which Buffett extols the brand’s qualities. As the Wall Street Journal writes today,
Move over Brioni, the truly rich and powerful are wearing Trands.
The obscure menswear label is produced by Dayang Group, a clothing company founded by Li Guilian, 63 years old, a diminutive farmer-turned-fashion mogul, in northeast China.Ms. Li’s company got a major boost after Mr. Buffett, chairman and chief executive of Berkshire Hathaway Inc., recently appeared in a Dayang promotional video, posted on the company’s Web site. He heaped praise on Ms. Li, her company, and the nine Trands suits he proudly owns. Shares of Dayang’s Shanghai-listed subsidiary, Dalian Dayang Trands Co., have soared by more than 70% since the video was posted on Sept. 10.
Two years ago, Mr. Buffett came to Dalian to attend the opening of a new factory for Iscar Metalworking Cos., one of Berkshire Hathaway’s recent acquisitions. David Margalit, Dayang’s global marketing director, had a friend who was an executive at Iscar. Spotting an opportunity, Mr. Margalit suggested that Mr. Buffett get fitted for a Trands suit while he was in town.
“Five minutes after I got into the hotel room these guys came bursting into the room and before I knew it, the two of them were sticking measuring tape around my thigh. It seemed a little personal to me,” Mr. Buffett says. “But they sent them to me and I never had to have an eighth of an inch changed.”
Even after 14 years, Trands isn’t particularly well known in China, at least not before Mr. Buffett began promoting it. Its 20 stores are concentrated in second-tier north China cities such as Dalian, Shenyang and Taiyuan, where its suits are expensive by Chinese standards. The cheapest cost around 6,000 yuan ($880), and the most expensive, made from fine cashmere, are upwards of 20,000 yuan.
This week, the Trands promotional video of Mr. Buffett played in an endless loop on a giant screen at the entrance to the 20th annual China International Garment & Textile Fair.
“I now have nine suits all made in China. I threw away the rest of my suits,” Mr. Buffett says, every three minutes or so.
With stories like Buffett’s endorsement of Trands, German designer Michael Michalsky’s involvement in designing a China-only line for a domestic sportswear designer, the purchase of luxury brands like Pierre Cardin and Aquascutum by Chinese companies, and domestic luxury brands like Liwai, Shanghai Tang and JNBY garnering more attention in China and abroad, it is only a matter of time before luxury Chinese fashion brands and designers join their Japanese and European counterparts on the world stage.