“At that time I think the market will have been covered. We thought of expanding to other markets but decided to focus on Romania instead, on a market we know well and understand,” said the businessman who established Benvenuti in 2004.
The company has opened two stores since the beginning of the year in Coresi Brasov and in Mega Mall in Bucharest. A new store, number 47, will follow in Drobeta Turnu Severin in a shopping center of South Africa’s NEPI. Another store was scheduled to open in Timisoara in another NEPI-owned mall, but was postponed for 2016.
Benvenuti’s plans are to expand cautiously as it has done every year after 2009. The focus, Dan Pavel says, has been on both the visible part of the business – the stores, and on the suppliers. About 80% of the suppliers are Italian, but their manufacturing operations are only partly based in Italy. Some also manufacture their products in Romania, hence the ‘made in Romania’ label on 25% of the merchandise in stores.
Benvenuti is the third leading footwear retailer in Romania by revenue after German-held Deichmann and local-held Otter, now that Leonardo has gone bankrupt. Leonardo had been the market leader until 2013 and then lost the top spot to Deichmann. It went bankrupt this year. Pavel was actually a Leonardo co-founder along with Florin Panea but left more than a decade ago to establish Benvenuti.
Benvenuti posted 84 million lei (EUR19 million) revenue last year, an increase of almost 25% on 2013.
“Business has been relatively stable this year. I think we’ve reached maturity, we’ve reached our potential. I believe our revenue will be flat at the end of the year,” Dan Pavel says.
The small fluctuations in Benvenuti’s business are due to the weather, since footwear retail is easily influenced by weather.
“That consumer spending increase we see on paper for both food and non-food products is because of the increase in taxes collected from small retailers, who got scared by the ANAF’s (tax authority) many inspections and started issuing cash receipts. I think it’s only temporary.”
This goes not only for small grocery retailers but also for the footwear industry, the very industry Benvenuti operates in, Dan Pavel added.
Pavel believes consumer spending has not gone up at all and will only be able to do so once incomes increase. The minimum wage increase is not enough to give it a boost, he says.
(English version by Loredana Fratila-Cristescu)