Mass Market Industries Moving to Bulgaria. Luxury Industry Businesses Relocating to Romania and Serbia
While many local and regional publications are flooding us with news on the relocation of many mass market brands from Romania to Bulgaria, the luxury brands in Bulgaria are taking into consideration in the near future the relocation of some businesses to Romania and Serbia.
Just like CPP predicted in January 2009, the development in 2008 in Bulgaria on segments like fashion, jewelry, accessories has been forced, even artificial. Retailers who already distributed well known brands have rushed into signing contracts of monobrand franchises with other stores. The price to pay was high, with high rents, but banks were quick to offer flexible credits.
We have expressed out concern while talking openly with the brands; in our opinion the market isn’t ready for monobrands like Dolce Gabbana, Versace (first line), Canali, Armani, Audemars Piguet etc. The well known brands active on the Bulgarian market, like Max Mara, Hugo Boss, Zegna, Escada are the ones that perform best and indirectly sustain other brands in portfolio. Therefore all these companies are planning to start multibrands in other countries for products that do not sell on the Bulgarian market.
While the romanian luxury market exceeds 185 million euros (2008), the one in Bulgaria barely reaches 80 millions euro (2008). We’re not even mentioning the differences between customers with wealth – over eleven thousand in Romania and eight hundred in Bulgaria (the rest are shopping abroad). Serbia comes into picture as an interesting market, even if it is not part of the EU, has a luxury segment currently developing and the economy is not as affected as other countries in the region.