“We see slight growth of our business from 2012,” El Jamil said
The growth will largely come from the new portfolio additions such as Kenzo, and the expansion of the retailers the company works with.
The Lebanese-born executive says that the specialist retailers will only expand if new malls open, as the street front retail will need a few years to develop.
Niran sells its products through 150-200 specialist stores such as Sephora, Douglas, Marionnaud and B&B. The importer also has several independent partners. It also sells Bourjois products through hypermarkets and some drugstores, because they also target average income people.
When the company arrived in Romania in 1994 it used to sell its products through 15 or 20 specialist stores. It now has ten times more partners and there is potential for more stores, says Hussein El Jamil.
He started the business in Romania 1994 at a time when the world economy was opening up because he found opportunities in this country. The company began by exclusively importing brands like Givenchy, Nina Ricci, Moschino, D&G, Ungaro and Bourjois. It is still importing all of them today except for D&G and later added Hermes, Valentino and Kenzo.
The market has changed tremendously since his company first started operations in Romania, but some brands are still hard to persuade to come, El Jamil says.
Niran Co. Products’ majority shareholder says that his company is not a brand collector and each new name is added to the portfolio only after careful consideration. Moreover, even after being added, brands and products are reviewed monthly, and sometimes even more often than that.
Hussein El Jamil says Romania is in a better position than all the other Eastern European markets. Hungary and Poland’s are larger, but they started developing sooner. Romania’s several-year lag is precisely what makes its potential so important.
“There’s huge potential here. When we first came we found only a few stores in Bucharest. In 2001 an international chain introduced the beauty-shop concept and that’s when it started.”
This was when international companies started coming, which now reach the entire country.
Hussein El Jamil estimates the local luxury cosmetics and perfume market at EUR60 million to EUR65 million. This does not include the many fakes sold in Romania. The market has increased by 20% to 25% since 2008.
The sector was not as affected by the crisis as other businesses, Niran’s officials said.
The market is not divided equally, he added, i.e. perfume accounts for 60% to 70% of the total. Cosmetics account for 20% to 25%, while personal care products for the rest. Romania is lagging behind when it comes to spending on personal care products. Perfume accounts for 50% to 55% of the international market.
The market has developed, as one can see when looking at what used to be popular a while ago. Customers used to buy mostly 30 ml bottles, now they are buying bigger containers, Hussein El Jamil says. The expansion of retailers meant more and more such products reached consumers. The rural areas where almost half of Romania’s population lives remain the problem, though.
However, the market continues to grow every year and Niran Co Product’s official sees it growing slightly in 2013.
Niran Co Products will grow at the same pace as the market, because of the product releases at the end of last year and this year. Retailer expansion will help, too.
Its market share is 20%-23%, according to El Jamil. Revenue in 2012 stood at EUR12 million to EUR15 million, as calculated by ZF based on market share. Revenue in 2011 amounted to EUR7 million, according to the Finance Ministry website.
(English version by Loredana Fratila-Cristescu)