To support this expansion, Inditex will hire 400 new employees, ending up with a staff of more than 1,500 people.
Ever since it entered the local market, the Spanish chain focused on quick growth, opening more than ten stores per year. The company’s strategy was to cover the country’s major cities with several of the seven brands it brought to Romania.
Inditex brought Zara, Zara Home, Bershka, Pull & Bear, Stradivarius, Oysho and Massimo Dutti. The only brand in the chain’s portfolio that has not yet been introduced to Romania is Uterque, which sells handbags and shoes and mainly targets the above-average income customers.
So far this year, Inditex opened 12 stores in Craiova (Zara, Bershka, Pull & Bear, Stradivarius), Sibiu (Zara, Massimo Dutti) and Iasi (Zara, Bershka, Pull & Bear, Stradivarius, Massimo Dutti, Oysho). By the end of 2012, they will open at least six more stores in the mall currently being developed by Carrefour and NEPI in Ploiesti. The chain is in talks with other locations, but no definite plans have emerged yet.
Inditex has bet on shopping centers since it entered the market. In Craiova, it opened a store in the Electroputere Parc mall, and in Iasi, in Palas mall. In Sibiu, however, both its shops were on the street, since the only mall is on the city’s outskirts.
Outside of Sibiu, Inditex has only one other store on the street, in Pitesti, opened under the Zara brand in 2010.
In Bucharest, where the company owns 26 stores under all seven brands, Inditex chose to go to malls and shopping centers, avoiding street locations. Then again, Bucharest does not have a high street for mass-market brands, like other European capitals such as Brussels or Rome. According to sources on the market, Inditex was in talks to open a store in the historic center, but these plans came to nothing, since the spaces are too small and the rent is too high. The retailer was also interested in Piata Romana, but these negotiations also failed.
Inditex has not been the only company to bet it all on expansion this year. Sweden’s H&M have opened five stores so far, all of them outside the capital, despite being latecomers to the local market.
In its first year in Romania, H&M opened 11 stores and another five this spring. According to the company, there is more to come.
The most important fashion retailers on the local market – Inditex, H&M, C&A and New Yorker – will by the end of the year have 30 stores more than in 2011. One reason why they keep investing is that the market is still underdeveloped. The retail market, according to research company Euromonitor, is worth around EUR2 billion.
Another reason is that, although consumption fell by about 20% in 2009-2011, the four companies’ sales continued to grow.
Inditex opened 14 stores in 2009, another 14 in 2010, and 21 stores last year. The group’s sales also kept growing, from EUR75 million in 2009 to EUR100 million in 2010 and roughly EUR150 million in 2011, according to ZF estimates. This year, with 18 new stores, Inditex might reach EUR200 million.
(English version by Radu Bostan)