The first TimeOut stores will open in AFI Palace Cotroceni, Carrefour Orhideea and Fashion House Outlet in Bucharest. The three locations were selected precisely to assess the market and the potential of the brand, said Philippe Besadoux, the chief executive officer of Kenvelo, a group that entered Romania with the brand under the same name a decade ago.
He says the US brand did not arrive via a franchise but a partnership, as Kenvelo shareholders also own a stake in TimeOut. The other brands are not franchised, either. Tom Tailor is present in Romania via a joint venture with its parent company and Kenvelo has a worldwide manufacturing contract with Lee Cooper.
Kenvelo had only one brand up until last fall, but expanded by two more last September. Moreover, Besadoux says he is in talks for a fifth brand to introduce in Romania. Although he would not reveal any names, he says it is something that the market lacks, because he believes there still are some brands that may be brought on the Romanian market. The Kenvelo official admits that the local market did increase over the last few years, attracting big names like Zara and H&M.
The French executive says TimeOut contacted Kenvelo to discuss their coming in Romania a second time. The first time it had been operated as a franchise and the stores were closed during the crisis. Besadoux says that after testing the market with three stores, a decision will be made whether to go ahead with the planned ten openings for 2013 or not.
The Kenvelo official explains that the decision to add more brands to the portfolio was made because it gives the company more leverage in negotiations with retail space owners and banks. He added banks were interested in a partnership with his company, which chose to develop with support from its shareholders, though.
The group has expanded fast over the past year to 75 stores of the three brands. Seven more openings are planned by yearend, and ten stores are set to be closed.
Lee Cooper already has 14 stores, most of which (7) in Bucharest. It is also present in other large cities such as Oradea, Cluj, Constanta and Craiova (NW, south-east and southern Romania). All the stores opened so far are located in shopping centers. Six more stores are planed for opening this year, four of which in shopping centers and two in street front locations.
Besadoux’s plans for Lee Cooper do no stop here, as he wants to take the network to 30 stores by the end of 2013 and is looking at cities with more than 100,000 inhabitants.
Kenvelo’s official expects Lee Cooper sales to reach EUR4.5 million this year. They stood at less than one million in 2011, but the stores had only been operational for a few months.
Kenvelo’s sales should reach about EUR20 million in 2012, about the same as in 2011. Tom Tailor’s are expected to amount to about EUR2.8 million, which means the group might end the year with more than EUR27 million in revenue.
Sales in the first six months of 2012 are in line with the expectations, which is why the decision to launch TimeOut, Besadoux said. Although he expects Kenvelo’s sales to stagnate, he plans to close eight of the 53 stores of the brand, which are not profitable.
The group will also close two Tom Tailor Denim stores in Plaza Romania and AFI Palace, and keep only the Tom Tailor Casual, a decision made by the parent company of the brand in Germany, which realized that the products in the Tom Tailor Denim stores were too expensive for Romania.
(English version by Loredana Fratila-Cristescu)