BR Interview | Cornelia Nicolae (Fashion House Group Romania): Retailers will have to make their in-store experiences even more appealing to attract new consumers and ensure they return

The second Fashion House Outlet Centre in Bucharest, Pallady is being developed in two phases. Phase one will open with 8,700 sqm this summer and the remaining 4,000 sqm will follow at a later date. Situated near the A2 highway, the second outlet centre in the Romanian capital has direct access from the autoroute in a key location attracting a catchment area of over three million people. BR talked with Cornelia Nicolae, Retail Operations Director of Fashion House Group, Romania, about the Pallady Center and the company’s plans regarding it, the investment, the pandemic effect, as well as the consumers, the target and the trends in fashion retail. 

By Romanita Oprea

How would you define the role that Romania plays and its importance in the Fashion House Group development strategy?

Romania plays a significant role in Fashion House Group’s commitment to developing further its operation in CEE. The Group entered the Romanian market over 12 years ago, establishing a new standard in the local fashion retail market. With the opening of Fashion House Outlet Centre Militari in 2008, the Group not only launched its first outlet venture in Romania but also the concept of locating outlet centres within larger retail parks to the country which has proven to be a massive success.

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After over 12 years of continued success and a loyal customer base who understand and appreciate the brand and value offer now associated with the brand, we are on the cusp of opening our second outlet in Bucharest – Fashion House Pallady. This new major investment of EUR 25 million developing an Outlet in the eastern part of the capital further cements the strategic importance of Romania to the Group’s growth plans. Fashion House Pallady will open its doors on May 27 and will become home to numerous top international brands, offering attractive discounts all year round.

How has the pandemic impacted your plans on the local market and how did you adapt?

The COVID-19 pandemic has brought unprecedented challenges for the business. Throughout this period of uncertainty, we had to adapt quickly to ever-changing environments, ensuring our tenants were continually supported and our customers were kept safe and well during any visit to our Outlet. After the lockdown, we reopened Fashion House Outlet Centre Militari with numerous new initiatives and equipment in the Centre, an increased hygiene regime and ample signage and assistance to help consumers to stay safe while they shopped. We continue to work in partnership with our tenants, and closely with local authorities, to ensure a continued safe shopping experience for our outlet customers and all staff.

Despite the challenging context, we were able to continue with the construction of the Pallady centre when permitted, allowing us to now officially open our new Centre on 27 May 2021.

Even in this context, how would you characterize 2020?

Despite the economic uncertainties of 2020, Fashion House Group had a good year in Romania. Our offer of brand and value continued to be of interest to consumers, especially with financial uncertainties, they know when they shop at us, they will always have access to excellent discounts on high quality brands. Our performance throughout this challenging year has demonstrated the strength and flexibility of our business model, proving that is the winning formula of the outlet sector.

More than ever, people are more comfortable shopping in out-of-town shopping destinations that have free parking and ample space for safe social distancing. This trend has translated into success for Fashion House Outlet Centre Militari. The overall annual footfall exceeded our initial estimates, and there was a significant increase in average spending per head with customers enjoying numerous promotions of up to 90%.

As the world begins to return to a ‘new normal’ we are now seeing even more interest in the outlet model. We continue to welcome more and more tenants as partners looking to optimise their business by disposing of surplus inventory and generate cash to further invest in new season stock, trusting in our experienced team to deliver results for them.

What are your goals and major plans for 2021?

The outlet fashion market is going through a promising period, as consumers gradually resume their pre-pandemic activities, looking to renew their wardrobe. We expect a considerable surge in consumer spending in the second half of 2021, and brand and value will be core drivers in purchasing. We are confident that this will bode well for our outlet centres.

We are currently focused on driving Fashion House Group’s next phase of growth in Romania. The EUR 25 million investment is our true reflection of our mission to innovate the future of the shopping experience. At over 12,000 sqm, the project is being developed over two phases and will accommodate over 60 stores – offering customers top-quality international brands with discounts up to 70 per cent, all year round – a children’s play area, restaurants, and over 300 free car parking spaces for visitors.

The strategic location, high service standard, quality of tenant mix, and the picturesque architecture with open-air galleries – a new concept in the country – are clear assets through which Fashion House Pallady will quickly establish itself as a smart shopping destination on the commercial map of Bucharest and beyond.

It is encouraging to see that so many renowned brands are ready to open in this new venture to deliver another successful retail experience. Leading sportswear brand Puma, along with other famous names such as Killtec, Tom Tailor, Lee Cooper, Triumph, Otter, Sizeer, Ecco, Colin’s, US Polo Assn and many others are currently finishing off their brand-new stores. We are honoured by the trust they have placed in us and we remain committed to providing the best quality services to them all going forward.

How would you characterize your target?

We target consumers who value high-quality premium brands at affordable prices. Over the last months, we have witnessed people putting much greater emphasis on buying brands they trust. They do remain loyal to their beloved brands but are also more sensitive to value for money. Following this trend, we have developed even more tempting discounts for top-quality products across a wide selection of famous national and international brands this year.

We will continue to expand the mix of tenants, provide additional added value, and create an exciting customer experience. With our two offerings, we are convinced that we will be able to satisfy the needs of all of Bucharest residents and its many visitors too.

How important is for you the way the company communicates?

All brands need effective communication to be truly visible and trustworthy. We have always focused on clearly communicating the advantages of the outlet model for both consumers and tenants. We value quality in everything we do. We offer consumers a wide range of high-quality international brands with discounts of up to 70 per cent, all year round, while our tenants find in us a reliable partner for optimising their business success.

What do you wish for the launch of your second outlet in Bucharest?

We are confident that our new development encompasses all the advantages to establish itself as a major shopping destination in the capital. At the exit to the A2 motorway, only 25 minutes from the city centre, Fashion House Pallady serves a total catchment area of over three million inhabitants of Bucharest as well as those travelling along the A2 motorway, the main access road to the Black Sea.

Another strength is the unique design featuring open-air galleries, which in the current climate is more comfortable for customers. All stores have separate entrances in a landscape that mirrors the ambiance of the historical old town Bucharest. Featuring classic Romanian architecture, the new outlet offers an enchanting smart shopping experience.

How difficult is to launch it during the pandemic?

The opening of any new outlet is not without challenges. However, we have had a great team who have worked incredibly hard to make Fashion House a success. Our key priority is to ensure we provide a safe shopping environment for all our customers and staff, taking all necessary measures to ensure everyone is protected.

For the Romanian consumers, the shopping experience now requires three elements: safety, quality products and great prices – and we meet this criteria with both our outlets.

How has your extended experience in Stefanel helped you in the new role?

Over 24 years have passed since I joined the fashion industry. Being part of Stefanel was an amazing journey, with a lot of hard work, but also with many opportunities and accomplishments. This broad experience instilled in me a customer-focused mindset and the importance of product quality. I am confident that my previous experience will empower me to inspire the local team and take the company to new successes.

How different is the Romanians’ shopping experience than of other East European customers?

Compared to other markets, Romanians remain optimistic and that fills us with confidence of continued success. History has shown us that even in times of economic instability, the outlet business remains on an upward trend as customers tend to save more without changing their consumer habits.

What are the trends that fashion retailers must pay attention to nowadays, in your opinion?

Many experts state the pandemic will continue to shape the industry for some time to come and impact trends over the coming years. The COVID-19 pandemic has accelerated the shift towards a more digital world. With the lockdown and social distancing restrictions, many Romanians have migrated to online shopping, but also discovered some e-commerce pain points such as clothes that don’t fit, returns that take longer to process and tiresome customer service. We expect this trend to decline in popularity once social distancing restrictions are relaxed. After a year spent largely inside, a vast majority of consumers miss the in-person experience, but they will be more selective in choosing shopping destinations. Retailers will have to make their in-store experiences even more appealing to attract new consumers and ensure they return.