According to Forbes, the German retail chain with women’s fashion Orsay, which has been operating on the Czech and Slovak markets for almost 25 years, is negotiating the sale of its activities in both countries. For almost a quarter of a century, the fast fashion brand Orsay has a total of ninety stores on the Czech and Slovak markets, with sales of 1.1 billion crowns.
“I can confirm that Orsay is in the final stages of negotiations on the sale of its stores in the Czech Republic and Slovakia. If that doesn’t work, Orsay will go into insolvency here and close the store, “says one of the sources familiar with the course of the negotiations, who wants to remain anonymous but whose identity Forbes knows.
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The E15 daily contacted the Orsay brand directly, but so far without an answer. “If the Orsay brand is not rescued in a similar way to the Celio brand, the Czech retail market risks losing another fashion brand,” Jan Kotrbáček, CEE’s partner and head of retail space CEE, told E15. According to him, the brand can still be saved.
“I don’t have more specific and detailed information about their departure yet, however, a lot of those fashion brands have gone out lately. Orsay’s potential departure from the Czech Republic would really surprise me, “says Martina Drtinová from the research agency Incomind, adding that the brand will probably excuse its departure from the country with a pandemic. “But the reason may also be that we are a small market for Orsay, which simply ceases to pay off. Such brands then move to countries where they have many times more customers, “he believes.
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For the last two years, for example, the Promod and Camaieu brands have withdrawn from the market. Pietro Filipi went through an existential crisis and a change of owner, and Celio also fought to maintain its position in the country last year. Kotrbáček reminds that Celio eventually found a new partner for the Czech and Slovak markets, so the brand in the market remained in the representation of the partner, with the fact that he is now working hard to revitalize the position and performance of the brand in the market. “So far, the partner, CS Apparel Group (CSAG), seems to be doing well, mainly thanks to a well-established omnichannel strategy,” adds Kotrbáček.
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The French fashion chain Promod has gradually closed all its stores in the country over the last two years. In the financial year 2019/2020, the company’s sales fell by eighteen percent to 164.6 million crowns. It increased its profit by CZK 2.4 million, but at the same time, due to further developments, it stated in the annual report that the pandemic had a significant effect on its turnover.
But the French are generally not doing very well on the Czech market. Two years ago, the Czechs also had to say goodbye to the Camaieu clothing network. According to Cushman & Wakefield, a total of fourteen brands left the Czech Republic in 2020. However, Kotrbáček is convinced that this was not directly related to the coronavirus crisis. In such cases, according to his earlier words, it is often part of a long-term strategy or leaving a dysfunctional market.
However, the Italians do not reap success on the Czech market either. Carpisa Česko is also gradually leaving the relatively popular Italian handbag store. “Carpisa has already closed its stores, for example, in the shopping center not only in Nový Smíchov but also in Pankrác Arcades. However, the reason for leaving is always opaque, “said Drtinová.
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“One of the reasons why a lot of shops are leaving, for example, is that e-shops have taken over the role of brick-and-mortar stores to a certain extent,” thinks Drtinová. -shops create increasingly comfortable conditions in the style of thirty to ninety days to try the goods and the like. One of them is, for example, the Polish companies Modivo and Eobuv, which even opened the first “phygital” store in Prague a year ago, which is a combination of a stone shop with online sales and so far enjoys great interest.
Kotrbáček notes that there is generally a lot of competition in the fashion segment, both in physical and online stores. “The customer is evolving rapidly, changing their shopping behavior, and if brands are unable to keep up with existing customers and acquire new ones, they face competition from other fashion chains that offer similar goods over a larger area,” Kotrbáček points out. “Bigger fish” are then able to negotiate better rental terms than for smaller units. That’s why the fight of the smaller brands is really challenging.
Almost a year ago, the clothing giant Primark became one such “bigger fish” on the domestic market, to which the Czechs have always headed, for example, in neighboring Germany or Austria. It is popular mainly due to its low prices. In the field of fashion e-shops, which offer a quantity of cheap clothes and which are among the typical shops with fast fashion fashion, there is recently the Chinese Shein. However, there are often discussions and speculations about the ethical side of producing such cheap clothes, which very often have nothing to do with sustainability.
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