Debenhams added luxury cosmetics and fragrances, Marks & Spencer will start selling food, while H&M integrated its Home division into its fashion stores.
Portfolio diversification helps retailers gain new customers and market share on the new segment, which shows in their sales. The fashion market where H&M, Marks & Spencer and Debenhams operate is highly competitive, as the biggest names are already in Romania.
Moreover, Zara, H&M and C&A are clearly the top choice of Romanian consumers who spend EUR2 billion on apparel and footwear every year. Retailers part of the second tier by sales are trying to develop through securing strategic positions in malls, marketing campaigns or new divisions.
Marks & Spencer sells apparel, footwear and cosmetics in each of its UK stores. The company also owns a network of supermarkets in railway stations, airports and heavy traffic areas, which in Romania would be a direct competitor to Mega Image and Billa.
Marks & Spencer decided to combine the two formats into one in Romania, so a 1,650 square meter store will sell both apparel and food.
The first such store will open in Mega Mall, developed by South Africa’s NEPI, in mid May. The officials of the company had previously said they planned to bring this division to Romania but did not say how, that is separate stores or integrated into the fashion stores. Marks & Spencer Food will operate inside the fashion store in Mega Mall and will sell sweets, tea, wine, pasta and sauces.
The company has fashion stores in Baneasa Shopping City and Bucuresti Mall in Bucharest. Two other stores operate in Constanta and Iasi. It has recently closed its stores in AFI and Sun Plaza. Its representatives did not say whether the new format would expand to the already existing stores.
The new format will turn Marks & Spencer into a competitor of Zara, H&M and Debenhanms and also of the supermarket and grocery stores nearby.
Marks & Spencer will be a direct competitor to Debenhams only on the fashion segment, as the latter diversified by adding luxury cosmetics to its portfolio.
Debenhams returned to Romania after an almost two-year hiatus with a new franchisee and a store in Bucuresti Mall, with a new opening in Plaza Romania scheduled for later this year, ZF has found. The new franchisee, Bulgaria’s MRPI, holds the franchise for Romania and Bulgaria and plans to open two new stores a year in Romania.
The Debenhams store in Bucuresti Mall takes up 2,800 square meters and required more than EUR1 million investments. The three-level store sells fashion and homeware, as well as cosmetics and beauty products. The Debenhams stores will sell all the collections available in the chain’s stores abroad. The retailer will thus compete with both fashion retailers such as Zara and H&M and with cosmetics and perfume retailers like Sephora and Douglas.
Among the first retailers to have diversified is H&M, which integrated its Home division into the already existing stores starting 2013. The Home division operates in other countries, as well, and its products are sold in Romania only in some of the H&M stores.
(English version by Loredana Fratila-Cristescu)