French-held L’Oréal last week opened its first Armani Beauty boutique in Romania, choosing Baneasa Shopping Center for the single-brand store in Bucharest. The same mall also accommodates a Chanel boutique, a Dior, an Atelier Cologne and a Kiehl’s, the latter two also L’Oréal brands. Each of these companies has import and wholesale operations, which means some of the products also go to multi-brand stores like Sephora, Douglas and Marionnaud.
However, with the improvement in purchasing power and consumers seeking luxury products more and more often, the actors on the market decided to bet on single-brand stores, which carries their entire product range, which includes some exclusive products not available through multi-brand stores.
The development of such single-brand stores started with the Kiehl’s brand of L’Oréal about five years ago and then continued with Chanel a year later. This overlapped with Romania’s economy’s exit from the crisis and the return of spending appetite of Romanian consumers. Consumer spending rose at a double-digit rate in 2016 and 2017 and then continued to grow at a 5% to 7% annual rate.
Wage raises improved purchasing power and people started to go for more expensive products of all types from food to cosmetics and home appliances. An effect on the cosmetics market was the opening of the above-mentioned boutiques and another the development of the already existing actors, including a number of niche multi-brand fragrance stores.
“The luxury market has been extremely dynamic in Romania in the last few years,” says Cosmin Ban, general manager of the luxury product division of L’Oréal.
Under the circumstances, Romania is the first country in Central and Eastern Europe where an Armani Beauty boutique has opened.
The cosmetics and care products market stood at almost RON5 billion (over EUR1 billion) last year, an increase of almost 9% on 2018, ZF has found from the data supplied by market actors.
(English version by Loredana Fratila-Cristescu)