Hermes' trojan horse market entry strategy

Interesting FT story on Hermes, the luxury brand, creating a special subsidiary that’s completely separate from the Hermes line to pursue a market expansion strategy in China.  The goal is a Chinese brand, from Chinese designers, using Chinese production.

Question is whether Hermes is diluting its primary brand or finding a way around growing Chinese protectionism.  Hermes will continue its 18 stores in China and the main line will create no specific products for the Chinese market.

It’ll be interesting to see if the strategy works.  Are the Chinese ready to shift loyalties to a Chinese luxury brand or will they want to stick with their foreign favorites?