Rights of Light

"It's very difficult to do business in Europe. Besides promoting branding and sales, there are so many other things that we have to be cautious about," Zhu said.

He cited the English "Rights of Light" as an example. The UK property was a three-story building, and when Bosideng decided to add another three stories, the company ran into trouble.

Arguing that the new building would affect the way they get lighting, "our neighbors came to ask for compensation under the Rights of Light", which was in accordance with local law, Zhu said.

"But unfortunately, we didn't know anything about it."

Armando Branchini, executive director of Altagamma, Italy's luxury goods association, reportedly said it is likely a trend that Chinese companies will buy foreign brands and also try to create Chinese luxury brands worldwide.

But Chinese companies have had limited success buying well-known Western brands and expanding abroad.

Fosun Group, a conglomerate, failed to take a significant stake in Prada, when the Milanese group decided to raise funds by listing in Hong Kong instead.

In another case, in January 2010, Li Ning Co Ltd, China's major sportswear maker, opened a US flagship store in Oregon, but closed the store the following month.

"We have to be extremely careful," Zhu said.

Contact the writer at dingqingfen@chinadaily.com.cn