Fashion industry to see losses this year

Those who will manage to break even this year will be happy, says businessman Vicentiu Zorzolan, who owns the franchise for Esprit and Springfield, arguing that sales in fashion retail have slumped by as much as 40% since the start of the year.

“Sales have dropped by 35-40% from the same period of last year, with the peak hit in January-April. The hardest hit was the medium segment, but consumer spending rebound does not depend on us, or on the promotions, reductions or marketing activities all the companies in this sector have been trying to resort to in the past six months,” Vicentiu Zorzolan, CEO with AAV Group, a company holding the franchise for Esprit, Springfield, Cortefiel or Peacocks, told ZF. The first half of this year was marked by important moves in apparel and footwear retail, with most players being forced to radically change their strategy, both in terms of expansion and marketing, to cope with the slowing consumption pace. Many brands, such as Toi&Moi, Pinko or Aldo, were sold, while others exited Romania, and the ones that successfully coped with competition had to downwardly adjust their revenues each month. For the time being, AAV Group has not closed any store in the wake of registered losses, but is analysing all locations, with a decision in this regard to be made depending on the trend of turnover this year. “Profit margins are plunging. Those who will manage to break even this year will be happy, the more so as losses will be the keyword in the sector we operate in,” Zorzolan says. While the businessman’s plans still include bringing the Marc O’Polo brand in autumn and opening some stores in Constanta, Cluj and Timisoara, this does not stop him from seeing the market “reach the level of two or three years ago and 2010 not register a rebound, but hit the bottom”. It is only the newly introduced brands that make Zorzolan expect sales to rise by 30% this year, to 19m euros.