Staff Collection company, which operates the House of Art chain of stores, anticipates this year's turnover to reach about 61m RON (17m euros), an increase of 15% on the 2005 figure.
The company, which is controlled by the Mihet family witnessed a 4% decline of the business in RON last year compared with 2004. Turnover in euros rose by 8%.
The company intends to double the number of stores over the next two years, from 50 to 100 outlets, says Olivera Mihet, the marketing manager of Staff Collection. "We anticipate an expansion by 50 stores in 2007 and 2008," the company's representative says. House of Art, a private business started in 1994 is the largest apparel retail chain in Romania, Staff Collection's representative says.
"The results we obtained confirmed our expansion plans. The clothing market is propitious, it will go up in Romania, too, especially once the purchasing power rises after EU accession," says Olivera Mihet.
She adds that the investment in expansion will be of up to 5 million euros, depending on the location and surface area of the stores. At the same time, the company is pursuing the opportunity to expand abroad.
The stores have a surface area of 250 to 500 square metres each, with the value of an investment ranging from 150 to 200 euros per square metre.
"We have some contracts, but they are not finalised yet. We have a possibility in France, but also in Bulgaria," Staff Collection's official explains. The company will open three more stores, in Sibiu, Brasov and Constanta this year.
The company has three factories, located in Alba county and intends to buy a fourth manufacturing facility in the same area. The representative of the company did not reveal the value of the investment in this location. The move is contrary to the trend of the market, as some of the players announced they were planning to sell their production facilities to curb costs.
Staff Collection buys fabric from countries like France, Spain and Italy, which is then turned into apparel in its factories. It has more than 2,500 employees, about 1,000 of which work in the 50 stores.
"We don't use the Asian market to get our fabric," Mihet says.
The domestic companies in the textile industry were badly hurt last year by the entry of a very large amount of textile and clothing products made in Asia. These products that arrived on the market at very low prices created unfair competition for companies that were trying to hold on to their quality standards, so that many ended up on the verge of bankruptcy or concluded the year in the red.
"Chinese products are for a different type of customer. We avoid competition with fabrics or models from China," says Olivera Mihet.
Companies on the domestic market had other problems, too, last year. The increase in utility prices and the euro depreciation by 10% rendered manufacturers unable to negotiate export contracts.
House of Art
Has budgeted 17 million-euro turnover for 2006
Is a private business started by the Mihet family in 1994
Has a 50 store and three clothing factory network
Is currently employing 2,500 people, 1,000 of which work in its stores
Plans to expand the network by 50 locations between 2006-2008
Investment per square metre in its stores stands at 150 to 200 per square metre
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