The retailer thus made EUR72 million in revenue in 2011, up almost 10% on the previous year and expects revenue to be the same in 2012.
“Traffic in the 150 Leonardo stores is approximately 100,000 customers per day. The figure doubles during weekends, when 200,000 to 250,000 people enter the stores. Out of them 11% go home with a new pair of shoes,” say the officials of Casa de Insolventa Transilvania (CITR), the insolvency specialist the court put in charge of Leonardo’s reorganization. One in ten Romanians entering a Leonardo store actually buys something, while the rest settle for looking at the products.
In a time of consumer spending decline, Romanians have either switched to cheaper products, or to price cuts and special offers. At the same time, they also went shopping less often than they used to or chose to buy fewer products.
The insolvency firm officials also say that economic crisis changed the customers’ buying habits, too, as some of them who can no longer to afford to buy as many pairs of shoes as before buy fewer but higher quality ones. Those who used to buy higher quality footwear but can no longer afford to either go for affordable shoes or wait for discounts to get the high quality they seek.
Leonardo, which went insolvent on EUR100 million debt in 2009, resumed expansion last year, after two years. It opened 13 stores so that it now operates 150. It will continue to expand to big cities, as well as to smaller ones, currently not served by a Leonardo store.
The resumption of the expansion by Leonardo, although at a slower pace than in the boom years is the first sign that the Romanian business has the strength to bounce back, despite the fact that the last three years almost wiped out the performance in the pre-crisis years for most entrepreneurs. Florin Panea, Leonardo’s owner, is one of them.
The retailer will continue to close unprofitable stores for cost efficiency purposes. Leonardo has closed more than 100 stores in Romania and abroad over the last three years.
(English version by Loredana Fratila-Cristescu)