In Romania the outlets are a relatively new phenomenon, with outlets opening mainly in the sportswear segment. Romania is a market with a big potential for such shops, as Romanians are price sensitive, but also very demanding when it comes to buying new clothes.
Outlet stores usually target medium-income clients who are brand conscious, but not really addicted to the latest developments in the fashion industry.
Ruxandra Petrescu, marketing director of Bigotti, says the outlets will register a significant increase in the period to come. The company opened its first outlet just a few weeks ago. “We decided to open the Bigotti outlet in Bucur Obor, as our products are highly appreciated by Romanian consumers. We expect it to have a huge success,” Petrescu said.
Real estate developer Liebrecht & wooD announced it signed a contract for the Fashion House Outlet Center with the British outlet operator GVA Grimley, which will be located in the West Park on the Bucharest-Pitesti Highway.
The center will have an accommodation capacity for at most 100 shops, said Brendon O'Reilly, partner for outlet services with GVA Grimley. The company is operating other similar centers in Poland, the Czech Republic, Hungary and other countries in Europe.
In all the countries where it is present the company manages about 280 brands, including sportswear such as Nike, Adidas, Puma, and casual and office brands like Levis, Calvin Klein, Mexx, Timberland and many others. In this business the brands usually follow the operator, although no contract has been signed yet for the outlet center in Bucharest, O'Reilly says.
“What is specific for the Romanian market is that the outlet centers start to develop at the same time as the in-line shops networks do, which gives us great confidence on the success of this business local ly,” O'Reilly said. The Fashion House center will be opened in October 2008. It is estimated to have more than 2 million visitors per year. Up to EUR 38 million will be invested in the center alone, while the investment value of the West Park will reach EUR 120 million.
The Bigotti outlet targets an educated consumer, who appreciates the quality of the products and services, but is not especially interested in the products of the latest collections, Bigotti representatives say. The consumer must also by price sensitive so that it would fully benefit from the price reductions we will have.
The products sold in outlet stores are not only those left from the collections that were not sold in the first place in local stores, as this wouldn't be enough to support the sales volume. The products sold in the Fashion House outlet center will be shipped from the regional coordination offices for Central and Eastern Europe.
The Bigotti outlet sells only items manufactured for the Bigotti, Egobigotti and Artigiani brands. All the products have price cuts of between 30 and 70 percent from the initial price, Petrescu added.
Outlet locations are usually found in busy commercial centers, where middle-class buyers come. The investments for such a type of shop are similar with those for a regular in-line shop and cover the renting of the space, hiring of personnel, the interior design and the promotion strategy.
O'Reilly said the outlets have to be located in areas where the usual fashion-addicted customers don't go, but where the traffic is intense. This is also a reason why outlets usually sell more than in-line shops, O'Reilly added. Liebrecht & wooD Romania is planning to build up to six similar centers in the next few years, while there are other projects that include similar outlet centers near Bucharest.
“It is too soon to be able to announce plans for opening other Bigotti outlets. We are currently waiting to see the results of the first operational months. Based on this we will decide wether we will open more outlets,” Petrescu from Bigotti said.
Up till now Bigotti has 20 shops in Romania, out of which six are located in Bucharest. In the next years the firm will strongly develop its shop networks, in cities where it is already present, as well as in other new ones around the country. By the end of the year, they plan to open at least 10 new locations.
Other brands that might open outlet stores in the Fashion House include Converse, Geox, Lee, Wrangler, Patrol and Lee Cooper.