HUGO BOSS and MENGOTTI soon to close down
We could not ignore the rumours that started to surface around December 2008, both in the luxury industry as well as in the economic press. Actually, Hugo Boss on Calea Victoriei is in a state hard to describe and it is an idicator to the fact that it should have closed down over a year ago. It looks like the German brand did not make the right choice, picking as partner and franchiser a company who distributes detergents and shaving cream. Obviously a rash decision, as in the case of Escada. Romania seems to be a tentation for this type of brands.
It is unsurprising to find out about MENGOTTI as well. We can still remember the press conference at Casa Capsa where journalists could serve soup for breakfast and where we were told more about a certain painting owned by the proprietor rather than about the business itself. Around 1.5 million were invested in the store and we consider that this sum of money is at least double than the real figure. Although we do admit that the architects did a wonderful job with the location, evering else that followed justify these rumours. As far as the products are concerned, there was a complete lack of coherence and the display methods suffered as well. Most importantly though, the client service level was a clear indicator that sooner or later the business would close down.
Another mentionable element is the fact that the investor did not account the fact that in 2008 Romania had a mature luxury fashion market, with Romanians travelling all over the world and knowing the difference between multibrand and monobrand. It was obvious that the investment in such a multibrand shouldn’t have been to big, as in Victoria 46’s case. The reason for this is that, sooner or later, in an emerging economy the multibrands will close down and transform in franchises, living a relatively short life span. It is difficult to believe that The Place, Mengotti or Victoria 46 would have ever become a Romanian Collette or a fashion Mecca. The closing down of the two stores is not an indicator of the global crisis and neither of the potential for luxury in Romania. This is about starting a business without a coherent strategy, market research and without understanding the local luxury business.