Why major retailers are leaving Calea Victoriei

Rents in excess of 100 euros per square metre, poor pedestrian access, and the lack of car parks have caused some of the most luxurious brands to flee the main streets of Bucharest. What are luxury sellers’ solutions given that their brands do not always fit in with mall-type shopping centres? Some have chosen to close their shops, while others say they’re willing to wait until Bucharest has a genuine fashion district. Still, there are also some retailers that opt for shopping centres, even though their products are way above the average of products normally sold in such places.
“Calea Victoriei is simply not good for business any more, rents are very high and the flow of customers very low. We’re witnessing a heavy decline in terms of sales in 2007 and 2008 compared with 2006,” says Anca Matei, Nexus stores manager. Moditailia, the footwear and accessory retailer that operates under Nexus brand, had, until earlier this year, six stores in central Bucharest, two of which on Calea Victoriei. The company has decided to scale down its operations, and close one of the two stores.
Despite the level of European rents, Bucharest still lags behind several cities like Budapest and Vienna. Victoria Square, where some major luxury brands have managed to gain a foothold, does not have sufficient pedestrian access points, car parks, meant to offer the maximum access and comfort for visitors, and rents are inflated, say retailers.
There are also many companies that are waiting for these features to come to Romania, especially as the brand they represent does not match a mall-type shopping centre profile.
The rent per square metre in the area where Moditalia had two stores stands at 140 euros, a reason why other retailers chose to close their stores. Yet, other retailers have opted for a new strategy, opening stores in commercial galleries. Cristina Zaharide, the representative of Lancel, the luxury handbag and accessories store, says that in terms of expenses and profit it is much better for such stores to develop in a shopping centre.
Retailers are also avoiding other central areas, like Magheru and Dorobanti, because of the high rents and the strong presence of banking branches. Another solution would be the creation of leisure spaces, with parking lots and entertainment spaces, restaurants and coffee shops and fashion shops, with targeted areas including the Historical Centre and Unirii Boulevard.
However, companies are accusing authorities of not drawing up a concrete plan to guide retailers. The lack of such a plan has led to a dwindling flow of visitors, as people are not attracted by what is currently on offer in the central streets of Bucharest.
“There must be an intelligent policy for the creation of such a lucrative area considering economic, administrative and political factors, which changes periodically, just like fashion. For this, one needs know-how, and the necessary infrastructure must be created (…),” explains Romeo Pomponiu, general manager of Steilmann Bukarest.

Exits from Calea Victoriei
Lancel handbag store, Nexus footwear retailer and Vans sportswear importer are among retailers closing stores on Calea Victoriei because of the high rents
Rents in central streets top 100 euros per square metre
The Historical Centre is one of the most attractive areas for footwear and apparel retailers due to the number of large pedestrian streets in the district