//Perfume chain secures space for new store opening
Kommersant (Novosibirsk) Issue 16 (4554), February 1, 2011
Rive Gauche has chosen a place for its store in central Novosibirsk. Spending 1.5 million USD, the national perfume chain will open the store at 17 Krasniy Prospect, where the chain is renting 500 square meters. Rive Gauche waited for the right moment to enter the Novosibirsk market, experts say. Due to the economic crisis, real estate owners have become more amenable, while at the same time the cosmetics segment showed growth in sales volume in 2010.
The Rive Gauche store will open at 17 Krasniy Prospect in April, the Director of Development for the chain, Evgeniy Sapfirov told Kommersant. In his words, the company signed an agreement to rent a 500 square meter space on the first floor. The size of the investment, according to Mr. Sapfirov, is around 1.5 million USD.
The Rive Gauche perfume and cosmetics chain was founded in 1995. The head company is Rustiset Holdings Limited (owning over 120 stores), controlled by Oleg Boyko’s holding Finstar. According to the company, their turnaround in 2010 amounted to around 400 million euro.
The price of rental was 2-2.5 thousand rubles per square meter per month, believes Alexander Nazarov, the director of Nazarov & Partners Commercial Real Estate. According to his data, the 14-storey building at 17 Krasniy Prospect, including a 3-storey commercial space add-on, is owned by a pool of proprietors: the Federal Research Institute, owners of the Sibirskaya Troika restaurant, as well as several Moscow and Novosibirsk businesspeople. Because of this, Mr. Nazarov concludes, the Director of Business Development at Rive Gauche was faced with a complex challenge to resolve during rent negotiations.
Lydia Balovtseva, the director of the «Yves Rocher» chain in Novosibirsk, assessed the location chosen by Rive Gauche as very fortunate. “People are already accustomed to purchasing cosmetics here—«Yves Rocher» and L’Etoile are located next door,” she explained. In Ms. Balovtseva’s opinion, all stores in the segment will win because of Rive Gauche’s proximity, since “brand concentration creates a synergy effect, and growth in customer flow.”
During the financial crisis, the situation within the Novosibirsk cosmetics and perfume market remained more stable than in other FMCG segments, commented Maksim Klyagin, an analyst at «Finam Management». In his calculations, regional 2009 sales of such goods rose in comparable prices by 3.4% (up to 10.2 billion rubles), although the flow of retail goods contracted by 7.4%. In 2010, in the context of overall macroeconomic stabilization, a revival of the market was observed, the analyst points out: “The January-September 2010 results showed the sales of cosmetics goods in the Novosibirsk market as growing by 9.9%, while nominal growth made up 21%.”
Based on data from «Dubl’ GIS», the largest chain in Novosibirsk today is the local Parfumika chain, counting 16 stores. Nationwide chains also hold solid positions. L’Etoile has 10 stores, «O-lya-lya»—8, and «Il’De Bote»—3. Mr. Klyagin assesses the level of competition as “relatively comfortable.” In his words, the share of specialized perfume stores within the market is around 30-40%, and there “is room to grow.”
Rive Gauche does not plan to limit itself with one store. Another, in a 320 square meter space, should begin operations in March-April of 2011 in the Aura commerce center, which is completing construction at the intersection of the Kamenskaya highway and Voyennaya street. In the overall plans of the chain, says Evgeniy Sapfirov, is the opening of four or five stores in Novosibirsk, since the local market is far from saturated.