Azadea Group, the company that introduced the Zara, Pull and Bear and Sunglass Hut brands onto the domestic market, is to expand its current 3-store network to another 42 locations by mid next year.
"The retail is largely dependent on the development of retail space. We would have expanded long ago, had we had room to do so. However, we had to wait for the real estate sector to develop first," says Marian Radu, Azadea Group's country manager for Romania.
According to its representatives, the locations the company are expected to expand to include Trigranit Polus City Center Cluj, the shopping complex in Constanta and Baneasa Shopping City, where it has already rented 6,000 square metres.
"We are also in talks with many other developers nationally and also in Bucharest," Radu added.
The Azadea Group, which operates through Azali Fashion and Azali Trading on the Romanian market, is a retail group from the Middle East and the Gulf Cooperating Countries region. It has more than 30 brands within its portfolio, operational in 152 outlets. The group also owns the franchise for the brands of the Inditex group for both the domestic market and for the Middle East.
The expansion of the group in Romania includes both the development of the brands that are already present on the market, all of which belong to the Inditex group, as well as the introduction of new brands from the Inditex group and Azadea Group.
Other than the three Zara stores, due to be opened soon, the brands launched through the Inditex franchise include Massimo Dutti, Bershka, Stradivarius, Oysho and ZARA Home. As for its own brands, Azadea will introduce Jules and Boggi (men's clothing), Cool Cat (youth fashion), Piazza Italia and Oviesse (family concept brands).
Azali Trading and Azali Fashion derived around 14 million euros in turnover in 2005, according to the information available on the Finance Ministry's website. The company representatives anticipate a 40% increase in the business for 2006 though they would not reveal the exact figures.
"So far, the financial performance has been better than expected for all the brands," Marian Radu stated.
The company's representative did not elaborate on the investments made by the group in the 42 stores, adding only that the necessary budget for arranging the stores and the rents vary from one shopping centre to another.
He would not provide an estimate for the turnover budgeted for 2007, either.
"Given the future expansion plans, the turnover will almost certainly increase, though it is hard to estimate by how much. Our expectations are very realistic, and our investments in retail will increase in the years to come," stated Marian Radu.
According to the latest data available from the National Trade Registry Office, Azali Trading is 89% held by the Lebanese Grupo Moda Offshore.
Zara's local competition includes brands such as Promod, Castro, Mango, Marks & Spencer and BSB, all of which are currently operating in malls and shopping centres.
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