Playing It Cool: Arnault Castel, Kapok and the Future of Hong Kong Retail

In most cities, when an independent store celebrates its 10th anniversary, it’s called a milestone. In Hong Kong, it’s considered a miracle. Despite the city’s notoriously high rents, Arnault Castel has managed to single-handedly carve out a niche with Kapok, a series of multi-label lifestyle and fashion stores, each characterised by his own eclectic taste and a nose for unusual but effective store locations. “When I first started, I never thought it’d be still going after 10 years,” says Castel.

That’s an understatement: more than a retail store, Kapok has become an anchor for Hong Kong’s creative community, serving as a showcase for locally-designed products and a window into the wider world of design. It reflects the sensibilities of Castel himself. Practical yet ambitious, French-born Castel knew as a young student that he wanted to be an entrepreneur. Though he studied business, his true passion was in literature, so simultaneously with his master in strategic management he fellowed Flaubert, Camus and Dostoevsky into a second degree in literature at the Sorbonne. It’s around that time that Castel became mesmerised by Wong Kar-wai’s film “Chungking Express” and decided to move to Hong Kong.

Like many expats, Castel started his career in finance, but as his love for the city grew — along with his appetite for dim sum (he jokes about how much weight he’s gained since his arrival), so did his curiosity for other ways of living. He began to explore Hong Kong’s unexpected pockets of tranquility and thought about starting his own business.

It is in one of those quiet neighbourhoods that Castel suggests we meet: Sun Street in Wan Chai, where Kapok’s flagship store is located. It’s a typically muggy Hong Kong summer morning, but that hasn’t dampened his spirit. He arrives bang on time with a charming grin behind his signature thick-brimmed glasses and bushy beard. We sit at the tiny coffee bar inside the shop and chat over two cups of espresso.

Kapok-015Limitation, the root of creativity

There’s a saying in Cantonese: “Wherever there is danger, there lurks opportunity” (jau5 ngai4 bit1 jau5 gei1 有危必有機). It is derived from the Chinese word for crisis (ngai4 gei1 危機), which is made up of the characters for “danger” (危) and “opportunity” (機). Castel has been living in Hong Kong for 20 years; he sees crises — or to a lesser extent, restrictions and limitations — as the origin of creativity.

More than a decade ago, when Castel was working as a distributor for Italian notebook brand Moleskine, he needed an office; somewhere affordable, quiet, and centrally located. Knowing how hard that would be in perennially expensive Hong Kong, Castel searched off the beaten track. Eventually, he found a 1,000 square foot ground-floor space just off Tin Hau Temple Road, tucked behind the eponymous historic temple. With the landlord asking for just HK$12,000 per month, Castel decided to take the risk and signed the lease immediately. That’s when he realised the space had the potential to be something more. “This space is too big for an office,” he thought to himself. “What should I do with it?”

Castel loves shopping and he would hunt around the world for local, artisanal designs, but he was frustrated by Hong Kong’s retail landscape, which was dominated by formulaic luxury brands and shops that never offered the kind of functional, modern and understated products Castel wanted. To him, magazine browsing and shopping has become another way to discover new culture. “So I approached some independent and creative labels, mainly in Europe, to stock their products in Hong Kong,” he says. “They were also small in scale like my shop and with the attitude of ‘nothing to loose’, so they said yes to me and we grew together organically.”

The concept (store) of conviviality

Equipped with a low-rent space and an array of hard- to-find lifestyle products, Castel still faced one major problem. Cheap rent meant a quiet location in a cul-de-sac, which meant no passersby. That is normally the kiss of death for a retail outlet, let alone a multi-label store that sells pretty mugs and notebooks. Castel needed to fill the space and create a buzz without a big budget. He invited his artist friends to exhibit their work in the store.  On some evening, he brought in drinks around 6pm, stepped behind a DJ deck and gradually turned the space into a happening little event space. Bit by bit, through word of mouth, this uncharted territory in Tin Hau became a hotspot for young people in Hong Kong’s fashion, design and art scenes, not just to shop, but also to hang out with like-minded people.

The original office/lifestyle store slowly evolved into a concept store that blended art, design, fashion and music under one roof. Though other fashion and luxury businesses in Hong Kong have since adopted this model, Castel views their imitations as “gimmicky” – a last resort in an attempt to improve struggling sales and fight online shopping. “I did it out of necessity to make people come out of their way to my shop,” he says. He mentions his childhood in Ferrals-les-Corbières, a village of a thousand people in the south of France. “We go to shops to buy stuff but we also stop, meet and chat with each other. That’s how it all started centuries ago and now because retail needs to compete with [online business], it’s coming full circle back to the idea of creating an experience.”

Kapok-028Making a mark in Hong Kong

Since it opened in 2006, Kapok has struck a chord with trendsetters in Hong Kong, who were becoming increasingly frustrated with the influx of luxury shops catering to the nouveau riche from China, with expensive gold watches and handbags. For many young Hongkongers, acquiring a beautiful everyday object — a smart laptop bag, elegantly-bound leather notebooks, independent magazines — is now more satisfying than buying a show-off piece of jewellery. It’s reflective of a broader shift in consumer habits, away from flaunting wealth through expensive possessions, towards products that symbolise a rich quality of life. 

Kapok has grown bit by bit since its early days in the Tin Hau cul-de-sac. It now has nine locations in Hong Kong and three in Singapore. Each is site-specific, catering to a particular need and taste: Kapok on Sun Street is the “lab” where Castel tests experimental designs, while Kapok Tools in K11 targets a younger crowd. And while all the Hong Kong shops offer a wide variety of fashion and lifestyle products, such as wallets, watches, perfume and notebooks, the Singapore stores focus on practical and casual selections and stock a wider range of homeware – a luxury available to those in the tropical city-state, where Castel says living spaces are much larger than in Hong Kong.

Kapok-035The next big thing

Until now, Kapok’s shops have been small and intimate, but Castel says he’s ready to take the business to another level. “Landlords here are notorious for their greediness,” he says. “Even if I get a good deal, once the contract is up, they’d double my rent, and so I can’t put all my eggs in one basket.” The recent slowdown in the mainland Chinese economy has had a spillover effect on Hong Kong’s property market, as shops once occupied by luxury brands sit empty. “Maybe this is an opportunity to open an emporium with a proper cafe, a bigger selection of clothes, books and magazines,” says Castel.

The challenge will be scaling up while maintaining the atmosphere that made Kapok successful in the first place. The brand started off like an underground movement, and it still has a strong following of customers who make their pilgrimage every weekend to discover new music playing in the shop and browse through the eclectic mix of products while sipping a cup of coffee. Many believe 2016 will be the tipping point of the luxury business model — that it could be the demise of multi-label or department stores. As shopping can now happen at the tip of one’s finger and a cheaper price via an app, the profit margin for a middle man has been squeezed even further due to sky-high rents. As such, Castel made another bold move when the industry is scaling down — to launch Kapok’s own apparel collection. “We collaborated with a local label,” he says. “The aesthetics remain very French and Scandinavian but the fabric, proportion and tailoring is modified to suit our customers in Hong Kong and Singapore.”

Despite the political and cultural turmoil in Hong Kong, Castel remains positive, hopeful and enthusiastic. Sitting outside on Sun Street, I ask if he would still start a business today with the same model. “Yes, I think so,” he replies. “I still love Hong Kong. I think sometimes uneasiness is not a bad thing. It’s a wake up call for people to stop being too complacent.” The Frenchman in Hong Kong has found success in Hong Kong not only because of his taste, his adaptation to the city and his open-mindedness to the city’s culture, but most importantly, for his genuineness, values and courage to say and do what he truly believes.

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