The most important second tier fashion brands are, ZF has found, Kenvelo Grup, New Yorker and Takko, each of which with more than RON100 million sales. Behind them are LC Waikiki, Miniprix and Orsay.
The 20 most important second tier international and local brands, which are developing in the shadow of the top three, are seeing revenue of RON920 million from 520 stores.
The local fashion market is one of the most diverse, because all the big names of the mass-market segment are here and the number of retailers can compare to that on developed markets where purchasing power is much greater.
The executives who run the local operations of the fashion brands have repeatedly said the Romanian market is a gold mine because consumers are more willing to spend money on clothes than Czechs or Slovaks are, for instance. Even though the average net wage is twice as high in the two countries, consumers there are more cautious and more careful about how they spend their money. Romanians are more impulsive and pay more attention to how they look.
“Give a Romanian a reason to buy and they will do it, they are impulsive,” says Philippe Besadoux, the French executive in charge of the Kenvelo group local operations, which consist of the Kenvelo, Lee Cooper, Tom Tailor, Timeout and Mim brands, each of which assigned to a different legal entity. The group-wide sales stood at almost RON175 million last year, which puts Kenvelo about RON100 million behind C&A.
Romanian consumers have a lot to choose from when it comes to fashion brands. The only big names still not present in Romania are luxury industry names like Chanel and Dior. The most important mass-market companies are there, Besadoux says.
The high revenues of the top three fashion retailers in Romania are not just because of the strength of the brands and the Romanian consumers’ appetite for brand name products, but also because Zara, H&M and C&A stores are bigger than their competitors’, ranging from about 1,000 square meters to 2,500 square meters, according to the latest ZF data. They are therefore 10 to 20 times larger than the stores of their smaller rivals.
Philippe Besadoux says that only those brands that are adjusted to the local market by concept, design and price successfully develop in Romania. Local consumers are demanding and they look at both the apparel and the music and smell of the store, he says.
Despite the local market being large enough to accommodate hundreds of fashion brands, some international companies tried their luck in Romania and failed. They include New Look (franchised by the Greek company that also owns Intersport), Kiabi (part of the Auchan group) and Esprit.
(English version by Loredana Fratila-Cristescu)