Businessman Vicentiu Zorzolan, who brought fashion brands such as Esprit, Springfield or Cortefiel in Romania, this year expects lower traffic in stores and implicitly weaker sales, so that he decided to cut the number of retail employees by 7-8%.
AAV Group retailer controlled by Zorzolan in late 2008 had 170 employees and turnover worth 13m euros generated by the twelve stores in which it sells apparel and lingerie under Esprit, Springfield and Women'Secret brands.
"We're trying to cut costs. We're in talks with all the developers in all the projects we have. The sad part is that we don't know how much the crisis will hurt us. We'd rather work with developers on various scenarios we could act along at the moment we know exactly what's happening," Vicentiu Zorzolan told ZF.
Zorzolan, 39, was a business partner of Octavian Radu, owner of RTC group, until the end of 2007. Together, they brought Debenhams, Esprit, Springfield and Women'Secret domestically. Almost a year and a half ago, they decided to split the franchises they owned. Octavian Radu kept Fashion Retail Group and the Debenhams brand, and Zorzolan took AAV Group and the other three international brands.
RON decline is another blow dealt to textile retailers, as most their products are brought from abroad, and Zorzolan has been considering moves to mitigate the negative impact of this decrease.
"We have to raise RON prices, which will pose some problems. We'll increase shelf prices by 10% from last season (...). Of course, customers will buy less, but we have no choice," explains Zorzolan.
Since October, the sales growth pace has dropped by 4-5%, with the fashion retailer saying it lost part of its major customers in the wake of layoffs operated in certain industries.
While 2008 was a year of development, this year, at least in Zorzolan's opinion, is the year of consolidation, and of concentration in particular.
The year 2009 also means opportunities, well placed commercial spaces at much lower prices than a year ago, because should "consumer spending drop, one has to close part of stores".
Zorzolan's company last year signed contracts with two international brands, Cortefiel and Peacocks, and in February will open two stores in Plaza Romania and one Peacock store in Suceava.
AAV Group in 2008 hit 13m-euro turnover and this year expects over 30% turnover growth to 19 million euros, as a result of new store openings.
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