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Luxury products return to market
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10.03.10
source:
Company's news
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The world financial crisis made the British network of department stores, Harvey Nichols, offering luxury products, to expand their horizon. Due to reduction of sales in UK and Ireland last year the company decided to renew its plans on entering the new territories.
At the moment the retailer has already signed the agreement with turkish investment group - Demsa to open a Harvey Nichols department store in Ankara and agreed to develop business in Kuwait.
According to managing director of Harvey Nichols, Joseph Vann, attention to these countries is fueled by common expectation that the crisis in the british market will last for 4-5 years.
Harvey Nichols has already been considering Russia earlier.
Harvey Nichols leadership first declared their intention to enter the Russian Federation already in 2005. In 2008 Harvey Nichols tried to enter the Russian market in partnership with the company Uniret - branch of the turkish company - franchiser of Harvey Nichols in Eastern Europe. Uniret conducted negotiations with AFI Development on renting the trade spaces in the trade centre Màll of Russia that is being constructed in the new business centre Moscow city. But due to the crisis plans of the opening were postponed.
According to experts, Moscow is oversaturated with luxury brands operators. This can be seen from the quantity of premium brands boutiques: in this way, for example, Dolce & Gabbana is present in TSUM, Lotte Plaza, Tretyakovsky proezd and Barvikha. It will be hard for Harvey Nichols to compete in the Russian market.
Andrey Panfilov, director of the trade real-estate department of consulting company RRG, stresses that the operator has been considering the Russian market for a long time. «We started negotiations on the possibility of opening of the store on Kuznetsky most in 2005. However these plans did not come true», - he explains.
«It goes without saying that premium segment retail is not in the best condition. Turnover fell down both in the European countries and in our place. Based on some estimates, turnover of the trade operators decreased by a quarter in rubles, which is equal to 40% in dollar equivalent, taking into account the last year's devaluation. At that the nearest perspectives are not good at all», - notes Panfilov.
At the same time crisis is the time of opportunities. «This is a chance to rent a perfect space, which used to be very difficult before the crisis, when top street-retail was fully booked. This is a chance to bargain and get attractive rent rates. This is a possibility to get used to the market reality and encounter the post-crisis rise as a market player, and as a company who is only entering the market», - he notes.
Harvey Nichols department stores present classical luxury brands (Armani, Chanel and Christian Dior), as well as the brands, positioning themselves as a premium segment. According to Joseph Van, it is this concept that helped Harvey Nichols become a leader among the british retailers, managing trade spaces over 100 thousands square feet (around 34 thousand square meters).
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