RTC Holding owner, the Romanian Richard Branson finally admits defeat
In a recent interview to a weekly business magazine, Radu Octavian, the owner and CEO of RTC HOLDING, who thought of himself and was perceived by many, as the Richard Branson of Romania, admits failure and annouces he is selling his business and is looking for buyer(s). He blames the current economic crisis for the dramatic drop in sales at most of his holding companies, he seems to admit he is at a loss when it comes to vision and strategy. Throughout the past 5 months, Business of Luxury has been covered many of his chaotic business strategies, wondering the direction he really wants to take. Throughout the past 10 years, RTC included: wine distribution, restaurants, book stores, logistics & courier, pipes, fashion retail, accessories retail, luxury fashion and accessories, human resources services, real estate, production of stationery and birotics, coffee shops, IT & soft etc.
Mention should be made that most of RTC holding companies such as the stationery and multimedia stores DIVERTA have seen their peak and have thrived during the economic boom of 2005-2007 when banks would offer financing for almost any project, unfortunately, in many cases for projects and businessess with no sound future strategies. Is it really the crisis or the forseeable shift of retail to the internet (especially when it comes to books, DVDs, CDs) to be blamed for the current 40% drop in sales at DIVERTA chain of stores? Same questions might arise in respect to some of the other RTC Holding companies such as: the IT products distribution firm, the logistics and courier company or the stationery distribution company.
In 2007 and 2008 Radu Octavian seemed unstoppable, most likely betting on the anything sells state of the emerging Romanian economy. Except for Debenhams, the majority of the brands franchised by Rafar, the specialized fashion retail company within the holding, enjoyed temporary success which was mainly driven by the growing appetite of Romanians for brands, especially those with Mall locations. Months before the debut of the current crisis, we could hardly identify a clear positioning and a loyal customer base for any of the Rafar franchised brands.
Then, there came in 2008, the obvious expansion as Radu Octavian called it, into luxury, when the same company managing the mass market brands acquired the BALLY franchise store as well as a luxury shoes multibrand called Catwalk, which included brands such as FRATELLI ROSETTI. Early this year, both shops closed and there have been numerous announcements that the shops will reopen in a different location. Was it again a lack of strategy or a diversification euphoria?
Through clever PR, Radu Octavian has managed to create, throughout the years, the imagine of the visionary model entrepreneur, starting new businesses, selling existing ones and giving advice. His business model resembles strikingly with the one practically invented by Richard Brason who diversified the VIRGIN brand into every imaginable business, from airlines and trains to mobile phones, music and soft drinks. While some of Bransons businesses have failed, disappeard or maintained a mediocre market share, other have flourished. It is during the current crisis, that companies such as VIRGIN ATLANTIC are becoming industry leaders. After years of ferverous fighting with British Airways , Bransons strategy seems to produce results. Despite of the current world economic crisis, VIRGIN ATLANTIC has become in 2009 the only transatlantic airline with an increase in sales. Virgin Mobile and Virgin Holidays are two other unique successes in their industries, delivering exceptional results while competitors are struggling to survive. It has taken a combination of factors which Brason masterfully skilled: courage, cutting edge branding, vision and capacity to adapt. For Virgin, there have been many crisis, in each of the industries it is involved, especially those created by competitors, such as BA which abused many times its monopoly position in the UK.