Florin Panea, chairman and CEO with Leonardo footwear retailer, says he plans to develop Libelula store network that sells footwear to low-income people, which could cover a yet untapped market niche.
"Libelula project was launched six years ago and started as a test with two stores: one in Timisoara and one in Oradea. Last year we decided to expand at a very fast pace in all the small towns and so we set reaching 100 stores in two years as a target," says Florin Panea.
Libelula store network sells footwear at very low prices, targeting low-income consumers. At present, there are 15 stores operating under Libelula name, with a new one to be opened this month. According to Panea, the concept targets small towns of around 30,000-40,000 inhabitants, but could also be implemented in the districts located on the outskirts of the cities.
" (...) I consider the market we are targeting is very large, there are many cities for which the concept is suitable and we have the advantage of being the first," says Leonardo head. Investments in Libelula stores are much smaller than those in Leonardo stores, because furniture is cheaper, product stocks entail lower costs, while space and rents are smaller in towns.
Despite the high number of stores the network will include in 2009, Panea says their contribution to the revenues will remain low in the company's turnover, given the low prices of products.
For now, Libelula network will exclusively target the domestic market considering that in Hungary, where the company has built a strong presence since 2000, the market for the extremely cheap products of the network is very small, says Panea.
Leonardo Romania in 2006 reached turnover worth 268m RON (76.1m euros), up 59% year-on-year in RON, a value including Libelula sales, "but in an insignificant percentage".
Leonardo network includes 110 stores in Romania, 50 in Hungary and 2 in Bulgaria, with another 30 stores to be added this year.
At the end of last year, the company had voiced its intention to further expand in Eastern Europe, by entering the markets of Ukraine and Moldova, as well as Turkey. However, there will be no store openings on these markets earlier than 2008, according to Panea.
The retail area of Leonardo stores ranges between 600 and 1,000 square metres, with the optimal area being of 800 square metres, says the company's manager.
There is, however, a store of around 1,500 square metres in Oradea, with another two similar stores to be opened in 2008.
Products sold in Leonardo stores are acquired from plants in Romania and Italy or other countries through various types of partnerships, says Panea.
Beside its own brands (Patrizia Rigotti, Afrodita, Pablo Castillial, Best Walk or Fun Girls), Leonardo also sells international brands like Stonefly, Dr. Scholl, Samsonite, Adidas etc.
Leonardo
Plans to develop Libelula store network selling footwear for low-income people; wants to reach Libelula 100 stores in 2 years
Despite the high number of Libelula stores the network will include in 2009, their contribution to the total revenues will remain low, given the low prices of sold products
Reached turnover worth 268m RON (76.1m euros) last year, up in RON by 59% year-on-year
Net income rose by 51% to 13.6m RON (3.8m euros) in 2006
Pentru alte știri, analize, articole și informații din business în timp real urmărește Ziarul Financiar pe WhatsApp Channels
