15. März 2010 
Print
Print
Deichmann opts for direct investment in Serbia as franchise activity in CEE hots up
Plans by German brand Deichmann, one of the leading shoe retailers in Europe, to move into Serbia should act as a catalyst for other retailers to follow suit, says property consultancy King Sturge, but most are likely to take the well-trodden franchise route than the direct investment option favoured by Deichmann.
Ivan Todorovic, retail specialist at King Sturge’s Belgrade office, says Deichmann proposes to open 20 new outlets in Serbia over the next two years and is already in negotiations with developers to take units within their schemes.
“It’s very rare for retailers in Serbia to invest directly in new stores as the vast majority open outlets through franchises, ” says Ivan. “Deichmann’s move into the country instils confidence that is likely to stimulate activity by other major retail names such as Takko and C&A .
“There is already significant activity by retailers keen to negotiate soft deals in the current market and they have a selection of schemes from which to choose in Serbia’s major cities, both hybrids between retail parks and shopping centres, and high street developments. Israeli developer BIG CEE’s new chain of Western-style retail parks will provide further choice.”
Elsewhere in the Central and Eastern European region, a growing list of international retail brands are either seeking franchise partners or looking to expand with existing partners, among which are BHS, Debenhams and New Look.
“Franchising remains the most popular means of retailer expansion in Central and Eastern Europe” says Dominic Bouvet of King Sturge’s European retail team. “The franchise route offers new market entrants a low risk interest in an emerging market, albeit with a relatively low return. Hopefully, as the market evolves, we will see more retailers committing company resources to establishing and operating their own store networks in CEE markets.”
An interesting new development in Europe is the move by a small number of landlords to adopt the role of franchisee. The developer/investor effectively becomes the franchise operator, takes the unit themselves and directly approaches the retailer they wish to occupy it. This has the advantage of potentially avoiding traditional owner versus occupier disputes, while filling space and offering shoppers a brand that might otherwise be lacking. While still very much in its infancy, the concept could prove ground-breaking and may further aid expansion of retail brands across Europe.
Ivan Todorovic, retail specialist at King Sturge’s Belgrade office, says Deichmann proposes to open 20 new outlets in Serbia over the next two years and is already in negotiations with developers to take units within their schemes.
“It’s very rare for retailers in Serbia to invest directly in new stores as the vast majority open outlets through franchises, ” says Ivan. “Deichmann’s move into the country instils confidence that is likely to stimulate activity by other major retail names such as Takko and C&A .
“There is already significant activity by retailers keen to negotiate soft deals in the current market and they have a selection of schemes from which to choose in Serbia’s major cities, both hybrids between retail parks and shopping centres, and high street developments. Israeli developer BIG CEE’s new chain of Western-style retail parks will provide further choice.”
Elsewhere in the Central and Eastern European region, a growing list of international retail brands are either seeking franchise partners or looking to expand with existing partners, among which are BHS, Debenhams and New Look.
“Franchising remains the most popular means of retailer expansion in Central and Eastern Europe” says Dominic Bouvet of King Sturge’s European retail team. “The franchise route offers new market entrants a low risk interest in an emerging market, albeit with a relatively low return. Hopefully, as the market evolves, we will see more retailers committing company resources to establishing and operating their own store networks in CEE markets.”
An interesting new development in Europe is the move by a small number of landlords to adopt the role of franchisee. The developer/investor effectively becomes the franchise operator, takes the unit themselves and directly approaches the retailer they wish to occupy it. This has the advantage of potentially avoiding traditional owner versus occupier disputes, while filling space and offering shoppers a brand that might otherwise be lacking. While still very much in its infancy, the concept could prove ground-breaking and may further aid expansion of retail brands across Europe.
