Getting Foot in The Door

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How’s this for a retail strategy?

Open up one store in the decidedly middle-class Westfield Culver City mall and then plant another in a district that has defined L.A. hipster style – Melrose Avenue.

Seems a bit schizophrenic, but it reflects what Chinese sneaker and sports apparel maker Peak Sports Products Co. Ltd. is trying to accomplish: get some chic street cred while preparing to take on Middle America.

The 3,000-square-foot Melrose location, which opened last month in the Crescent Heights district, will serve as the U.S. flagship as Peak works on breaking into malls and shopping centers nationwide.

Quanzhou-based Peak had sales of $647 million in 2010 mainly in China, making it the country’s third largest sporting goods brand. Its 7,800 stores are the Chinese equivalent to the outlets that New York-based Foot Locker Inc. operates in U.S. malls. Indeed, Peak, founded in 1989 and traded on the Hong Kong stock exchange, sees Foot Locker as its primary competitor in the United States.

The Melrose grand opening was a big enough deal that Peak Chief Executive Jim Xu and Su Shulin, the governor of the Fujian province where the company is headquartered, attended.

“This store is just the beginning of our plans in America. We plan on increasing our investment here,” said Xu, speaking through a translator.

While not a discounter, Peak’s basketball and running shoes retail for $60 to $100 a pair, generally a bit cheaper than U.S. name brands. By contrast, Nike’s top-of-the-line Air Jordan 2012 has a suggested retail price of $223.

Still, Peak wants to play in the big leagues. Over the last few years it has signed endorsement deals with several National Basketball Association players, including Shane Battier of the Miami Heat and Dorell Wright of the Golden State Warriors.

Those deals also helped to promote the brand in China, where the NBA is the most popular foreign sports league. More specific to the U.S. market, it recently announced an arena-signage deal with the Heat, the league’s hottest franchise.

Peak, which is expanding into other countries, has been readying for its U.S. debut for some time. It opened an L.A. management office in 2010, and hired local designers for its U.S. shoe and apparel lines. The Culver City location opened in late December.

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