ry unstable and the confidence level of business had been badly affected. Then the Covid-19 pandemic followed. The worst time was 2020. Nobody thought this pandemic could drag on for so long. Cashflow was the major issue for most companies. It was especially bad for those that relied on tourists from mainland China; they had already suffered from the loss of sales in Q3 and Q4 and the situation had further worsened when Covid-19 kicked in, with the loss of local sales as well. Most companies had a cash reserve of only six months to a year, they could not sustain for a long period of time. It was extremely tough for most businesses in 2020, as most cash evaporated. With a drop in sales, many businesses had to introduce measures to control expenses, like cutting the working hours of staff, retrenching staff, reducing the size of offices, cutting the number of stores, etc. Retail businesses, in particular, suffered severely during Q1 and Q2 of 2020, when the majority of landlords still refused to lower the rent. We saw a number of businesses close down during that time. However, the resilient companies were able to take the opportunity created by the historically low rental environment to grow their business.  IRA: Tell me the story behind the launch of La Broderie and your plans for it this year. DW: During the second quarter of 2020, when the pandemic was at its worst, business was tough, sales were slow. By coincidence, I came across the art pieces of Ms Ava Cheng, a very talented local embroidery master. She started her embroidery journey at the age of five. She is proficient in traditional Chinese embroidery and French embroidery. I was amazed by her work and skills. Initially, the plan was to introduce the work of the master through exhibition, maybe for a limited period of time, say two to three weeks; however, taking the opportunity of the low rent environment, I decided to open an embroidery shop with my partner and display her work year round. Having a shop, we could offer a venue for people to gather to learn more about embroidery. The venue I thought most suitable was Lee Gardens. The location of the first shop sets the brand position and directs where it goes in the future. I think Lee Gardens is the right position for our brand. Also, the customers in the Causeway Bay area in general have high spending power and Causeway Bay is a convenient location to draw people in to visit. I was very lucky that the chairlady of property development company Hysan, Irene Lee, liked our business concept and appreciated the work of our master. She offered us a prime shop location, which is on street level at Yin Ping Road, right next to the Cartier shop. She has been supportive on the rental terms for our new brand, so we can run our business and promote the nation’s intangible cultural heritages.  Our product offering includes embroidery art pieces, scarves, fans, and jewellery. Our bespoke service has been very well received by our customers. The art pieces, scarves, and fans are mostly for gifts. Customers can have their initials embroidered on an item or they can provide us with graphics and request a tailormade art piece or art fan for different occasions, like weddings. Our best seller is the 18K-gold diamond butterfly bespoke jewellery collection. Most of our customers are female and purchase the product for themselves. The customers tell us that they have bought many branded accessories before and like our bespoke collection, from which they can choose a colour and style to create a personalised embroidered butterfly.  At the moment, we do not have plans to open another store in Hong Kong. When the Covid situation is in better control and there is an easing of travel restrictions, we plan to expand overseas, into places like China, Japan, and France, where there is a great demand and appreciation for art and embroidery. We will continue to develop interesting collections for our customers. IRA: You’ve been in the retail and business worlds for many years, but what was the experience of launching La Broderie in the middle of a pandemic like?  DW: This is an opportunity and a challenge at the same time. Due to the pandemic, landlords are willing to offer a prime location at a much lower rent and for a much longer term. However, it is a challenge at the same time, because there are only local sales. Furthermore, due to the social distancing measures, traffic and sales cannot be predicted. When we first opened our store on 1 November 2020, we had to arrange many small group sessions to invite close friends to visit our shop. When we had been operating for less than a month, the social distancing measures were tightened to the strictest level – no more than two persons could gather and dinner after 6pm was forbidden. It was extremely tough. In terms of marketing strategy, a big marketing campaign is not possible; we do collaborations with different brands and organisations and have regular events or workshop sessions at our store. We have collaborated with artists, fashion designers, jewellery designers, watch designers, and charities. We have also organised outside events at locations like the Gentry Club at K11 Musea and Hong Kong Jockey Club.  IRA: You grew up in a family that worked in the retail industry. What were some of the greatest insights and lessons you learnt from them during your childhood?  DW: My parents have taught me that cash flow is the key to business and we should be very alert to the changes in the market. When I was small, my parents often told me that if you have the economic means, you should purchase your own property, with the right timing. The rent we pay goes to pay off the mortgage, which in turn goes to our own asset. When we are running a business for a long period of time, rent, which is the biggest expense in our profit and loss statement, will be much more predictable. To be able to afford it, we have to have careful, long-term financial planning. Save up the profit for the initial deposit and buy the property at the right time. But it is difficult to purchase a store now, when the property values are so high. Also, it is impossible for a retail chain to own all its shops. Plus, most of the shops are operating in shopping malls now. Location is the key to retail. We have to be very careful in choosing the right location for the business. First, we select the district and decide whether to have a shop at street level, owned by an independent landlord, or at a shopping mall. For new brands in particular, I prefer opening a shop at a shopping mall, as they have a full marketing team to support their tenants on marketing campaigns and social media promotion. Also, they are willing to invest and to do regular festive campaigns to draw traffic in and promote their tenants. Different malls have different marketing strategies. This is one of the points I consider when selecting which mall to enter. Brand positioning is very important. Each mall has a select crowd of customers it targets and that should match with the brand. When selecting a particular location inside the mall, we also consider who our neighbours are. Within the shopping mall, there are big variations in traffic and it’s necessary to do a foot count. Do not rush into committing to opening a store when there is doubt. Do a foot count on a weekday and a weekend, and at different times of the day, to gather the data on traffic. Also, keep an eye on whether the traffic is only passing by or contains genuine shoppers. Over the years, I have seen that rent has been increasing with a very unhealthy momentum. I have seen when rent was at its peak, businesses were very aggressive in their expansion to capture market share and build their brands. I still remember there were times when jewellery and watch stores expanded aggressively. Many of the shops have been taken up by the jewellery and watch companies, which can afford the rent. We may see two or three jewellery stores with the same brand right next to one another. When driving past a main road, you may see more than 10 jewellery or watch stores within a few minutes. In some cases, international brands come to Hong Kong with an optimistic outlook but do not have a thorough understanding of the market nor a realistic financial forecast. They open three to five stores very quickly, within two years, and close all stores within five years of operation. Opening even one store in Hong Kong involves a substantial amount of money, renovation, and salary – not to mention rent. It is important to do an in-depth assessment and planning before opening a store.  IRA: If you could change anything about the retail industry right now, what would it be?  DW: When we start a business, we are looking for a sustainable and long-term business. The current average rental term in Hong Kong is two to three years. If the business is able to survive the first two to three years, the next rental term has to be negotiated. If the landlord sees the business doing well, the rent will increase 20-30 per cent or even 50 per cent, which makes it very tough for a business to make profit. A longer rental term, like five years, would make a healthier environment. IRA: You also oversee Italian chocolate brand Venchi, which you brought to Hong Kong in 2007. How is that tracking? DW: Venchi opened three more shops last year – Lee Gardens, Citygate, and IFC. Also, Venchi has moved to larger shops at existing locations like Harbour City and Sogo. Currently, we have 14 shops across Hong Kong, Kowloon, and New Territories. We are happy with the performance and the number of shops in Hong Kong. When opportunity comes, we would like to take up a larger shop in the mall where we already have one.  IRA: You are quite passionate about protecting Chinese arts and culture. Why is this important to you and can you tell me about some of the work you are doing in that space this year? DW: China has over 5000 years of history, with so many interesting cultural relics. I have always been fascinated by it and would like to add a modern touch to it. That is the reason we started La Broderie in the first place. We have added a contemporary element to the traditional culture.  Recently, I have partnered with Art Exhibitions China to promote national history and culture by launching a series of intellectual property products with traditional Chinese characteristics. We apply the images of the five major themes, including the Qin, Han and Three Kingdoms Dynasty, Tang Dynasty, Elegant Song Dynasty, Mysterious East, and National Treasure of the Silk Road. The concept is similar to Disney, which uses different characters like Mickey, Minnie and Donald Duck – IP created in the stories – to apply on different types of products like stationery, food, toys etc.  The concept of our China project is similar but our IP graphics are created based on the real history and cultural relics from the museum. We have a design team to convert the traditional images on cultural relics into modernised graphics. Last year, we partnered with different famous brands, including Xiaomi and Hope Group in China. This year, we plan to collaborate with the Hong Kong Palace Museum.