Leonardo is planning to extend its store network on Eastern European markets, where the company eyes Republic of Moldova, Ukraine and Turkey, after it opened its first outlets in Hungary and Bulgaria.
"We are currently analysing these markets and, as soon as we find locations that meet our standards, we will open new outlets in any of these countries. Already having the experience from Hungary where we operate 31 stores, as well as from Bulgaria, where we operate 2 outlets, we estimate we will succeed in carrying out our new expansion projects," Gratian Ivan, Leonardo's commercial manager told ZF Transilvania.
The company representatives also estimate Leonardo will open five new outlets in Hungary and one in Bulgaria by yearend. The sales on Hungarian market are put at 12 million euros this year, accounting for a 30% rise against last year. "We cannot make any explicit estimates regarding the sales in Bulgaria, but the business is starting to grow on this market too, given the boom in the real estate projects on the retail segment," stated Gratian Ivan.
The company's strategy for 2006 also includes the development of a network of franchises, which comes as a natural development of Leonardo's business. "We opened a franchised store in Targu Jiu and we are considering other such projects. It is not easy to make a selection, since we must follow certain image, quality and service standards related to our stores. We only accept owners of retail space, because we want to be sure our merchandise is paid for," also said Gratian Ivan.
The company management projects turnover worth 74 million euros in Romania this year, a 30% rise against last year. Ivan also said the company's financial expectations were related to the development of its own network, while the franchises are expected to derive additional revenue.
Besides Leonardo SRL and Leonardo Hungary KFT, Leonardo group also comprises Leonardo Design - producer of commercial furniture and interior design. Leonardo SRL and Leonardo Hungary KFT account for 99% of group's sales. Leonardo group closed last year with a turnover worth 57 million euros in Romania and 9 million euros in Hungary and posted net profit worth 2.5 million euros (9 million RON) in Romania.
"Generally, the domestic market is growing despite economic constraints, especially in the fashion retail sector. The economic growth of recent years will lead to growth in the purchasing power, this way ensuring an implicit development of the market," explains Leonardo's commercial manager.
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