One cannot say for sure that the luxury market will not suffer due to the financial crisis, Carmen Preda, designer at Ovo Design, tells Business Review.
“It is possible, but strong companies that sell luxury products opt for durable strategies which also take into account losses and market fluctuations. This crisis may affect those people who do not have so much potential, but those who can afford it now will certainly continue to do so in the future.”
Other players see room for the sector to grow
“We all know that the local luxury market is just at its beginning. The segments that are more developed are the car, and, most recently, the boat segment (since there has been a surge of interest in this area over the last two-three years),” Camelia Buda, general manager of Euroexpo, the organizer of Luxury Show, tells Business Review. “However, there are still many brands missing on the fashion and accessory segments. What we do not really have are mono-brand houses,” says Buda. She explains that there is indeed a fair number of multi-brand stores but mono-brand houses have only just started to appear.
The most recent openings have been Louis Vuitton and Salvatore Ferragamo but more such high-end brands are expected to join the Romanian market.
“I think their absence was due to the low purchasing power. Over the last two or three years, more and more Romanians have gone abroad shopping and renowned houses have a very good system for monitoring clients. They have seen there are very many purchases from Romanians and have started to direct their attention towards Romania,” says Buda.
What stands out in this edition of Luxury Show is “the top quality of the participating brands and, in addition, more brands present, which is felt in the overall
good level of the show. The entire range of products is well represented and what we wish to happen is to have a large number of visitors,” says Buda, organizer of Luxury Show.
Companies participating in the show for the first time this year include Vertu, which entered the local market in May, Vendome, a very exclusive brand with a tradition in jewelry, and Aston Martin. Another brand taking part this year is Maserati, which in fact returned to Luxury Show, having skipped the previous edition.
“We expect around 7,000 visitors. Last year there were up to 7,000 and this year, with all the discussions about the crisis, 7,000 would be a very good figure,” says Buda.
The organization of the show cost the same level as last year, namely EUR 500,000. “We hope the financial crisis will not hit us and hope to have sales at least at the level of last year when they amounted to over EUR 12 million, but this depends on customers' spending power,” says Buda.
The previous edition of the event gathered 200 exhibitors and a total value of objects displayed of EUR 60 million.
During prior events, visitors of Luxury Show showed greatest interest in cars and boats.
“This year, due to the crisis – which is at the beginning, we do not know whether it exists or not but everybody is talking about it – we expect an interest increase in the jewelry segment since gold and diamonds never lose their value,” says Buda.
The event, organized while having in mind a wealthy public which is attuned to luxury, takes place under a new concept: Luxury City, a miniature town. The City creates an extravagant universe inspired by famous locations worldwide that ranges both across the vertical and horizontal. Luxury items on display were split into four areas: Luxury Marina, Luxury Night, Life Living in Luxury City and Luxury Mall.
This is the third edition of the event that showcases the latest trends in the luxury industry. This year, Autoitalia will launch the Maserati Quatroporte, which sells for EUR 142,000 (VAT included). The offer also includes a chauffeur for every Quattroporte ordered during the exhibition. The chauffeurs will accompany the owners of the new model for six months while their salaries will be paid by AutoItalia Group. Also, any buyer of Granturismo or Granturismo S will receive an exclusive Audemars Piguet watch or a set of five Salvatore Ferragamo travel bags that retail at EUR 6,450.
Autoitalia has imported 127 Maserati units to Romania over the last five years: 58 Quattroportes, 41 Granturismos, 20 Coupes and eight Coupe Sypders.
The firm will also display the Maserati Collezione Centro worth EUR 160,000 (VAT included) which was launched in a limited edition of 100 cars, four of which were sold in Romania, which suggests Romanians' appetite for luxury is still unsatisfied. Those interested could admire the Aston Martin Dbs model which was expected to be another point of attraction. Luxury City also showcased a wide palette of boats such as the Sunseeker models from the James Bond series: World is Not Enough, Tomorrow Never Dies, Casino Royale and Quantum of Solace.
Another participating brand, Ovo Design, which produces concept integrated furniture for residential customers as well as institutions and hotels, took part in Luxury Show from the very beginning, three years ago, including this summer during the special edition that took place in Mamaia. “We already identify ourselves with Luxury Show since this show addresses the target we aim for: the elite,” she says. Customers have incomes above the average and are generally aged between 35 and 60 years old, already having a certain status, having traveled and enjoying access to information and premium products from other domains as well.
Last year the company had several hundred visitors, out of which about a hundred signed contracts totaling hundreds of thousands of EUR.
“This year we expect to have at least 2,000 visitors since we have sent invitations to all our customers in our database,” says Preda.
Ovo Design has its own production unit in Chitila, on the outskirts of Bucharest and in total has around 1,000 employees. “The know-how in our company comes from a North American staff with over 30 years' experience in the domain,” says Preda.
The company will next year open stores in cities such as Brasov and Timisoara. Ovo Design already has a presentation store in Eforie Sud spanning over 6,000 sqm. “Being located near Constanta, the store is doing very well because in that area hotels and houses are being built all the time,” says Preda. In Bucharest the company has its production unit and a showroom of over 8,000 sqm which welcomes around 500 visitors every month. Although she declined to disclose the investments, Preda said considerable sums go into an opening since a great deal of space is needed (at least 1,000 sqm per showroom), plus substantial sums in the products that are on display in the showroom since these are premium products, plus the space also has to be especially furbished.
Preda says the company is sheltered from the financial storm since it has already signed contracts with renowned hotels in Romania, which will be underway throughout next year. Most of these hotels are already on the market, international brands that have opened in Romania.
Others are hotels undergoing upgrading, meaning they pass from the three- to four-star category, and for this they are willing to make large investments.
“Of course, there are certain reservations: all the people with money and a certain status have some reservations at the moment but this does not mean they can no longer afford it or do not wish to furnish their homes. Once a certain person has a turnkey house, they think also about investing in furniture,” says Preda.
By Otilia Haraga