Around a month ago, Belgian retailer Mega Image, which operates the supermarkets of the same name on the Romanian market, as well as Shop&Go convenience stores and discount chain Red Market, announced it would drop the Red Market brand. Company officials said at the time they preferred to rebrand the Red Market stores as Mega Image because they would be easier to manage.
Mega Image’s decision comes about half a year after French-held Carrefour, leader of the Romanian hypermarket segment, which is also present on the supermarket segment, announced it would keep only one supermarket brand, Carrefour Market, and drop Carrefour Express, the brand created in 2008 after the takeover of the Artima supermarket chain.
“The Carrefour Market brand was adopted for the supermarket segment following an international-level decision of the group,” says Andreea Mihai, marketing manager of Carrefour, explaining the reason why the retailer decided to drop one of its brands.
This is not Carrefour’s first move as far as rebranding is
concerned. The French retailer in 2007 acquired for EUR55 million
the 21-supermarket chain Artima from Enterprise Investors
investment fund.
The Artima supermarket chain was created by several Romanian
entrepreneurs, among whom businessman Vlad Ardeleanu, who is
currently Carrefour’s acquisitions manager. After taking over the
chain, Carrefour put its name to it, dropping the Artima brand.
“Global retail brands such as Lidl and Carrefour have as their mission to boost the profile of their own brand, not to help local brands grow,” explains Irina Ilie, associate director of brand strategy and design Brandient.
The takeover of one company by another is just one of the reasons that can explain the disappearance of a brand from a market.
“There can be various reasons for the disappearance of local brands -from faulty management to inadequate brand strategy and design. In the particular case of retail, which requires intensive investment in expansion, also at stake is the financial ability and the ability to take out loans,” she adds.
On the Romanian market there are two examples of brands that disappeared as a result of the companies’ financial troubles: bankrupt Univers’All and insolvent Pic.
The closing of the 14-supermarket chain Univers’All, controlled by businessman Razvan Petrovici, was the first resounding failure in retail. Pic, another Romanian-held company, held by the Penescu brothers, went insolvent in 2009 around EUR60 million in debt.
The financial crisis drove another brand out of the market, too. Supermarket chain Ethos owned by Ion Soloman does not have a single operational store left of the 20 it once had. Some of its former stores were taken over by Profi and Mega Image, which rebranded them accordingly. Profi, controlled by Enterprise Investors fund, also bought the nine Albinuta stores for which it paid EUR7.5 million and started rebranding them in 2008.
However, there are still local brands surviving on the market. One such example is Primavara, created by Ioan Avram. The businessman, one of the few Romanian entrepreneurs in retail to have weathered the crisis, owns the five-store chain Primavara. The store chain posted EUR37 million in turnover in 2009. Avram sold two stores in Bucharest and Pitesti to Mega Image at the end of last year. The two stores have changed their name to Mega Image, but the Primavara brand remains on the market through its five stores. Avram does not, however, rule out the possibility of selling the stores he still owns if offered the right price, which could see another brand disappear.