The German fashion chain Orsay, which has been operating in the Czech Republic and Slovakia for a quarter of a century, is negotiating the sale of its 90 local stores. During the coronavirus pandemic, several clothing brands have closed their stores in the country. Among others, for example, the French Promod or the British Next.
“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 this fails, Orsay will go into insolvency here and close the stores,” told Forbes magazine at the end of May, an anonymous source acquainted with the course of the negotiations.
According to this source, it was time for the sale of Slovak branches until the end of May, and for the Czech ones until the end of June. The company does not respond to media inquiries about its future.
Last year, the parent company acknowledged the financial problems it had encountered in Germany and Austria, among others. In the Czech Republic, according to the last published financial statements for 2020, the chain reported a loss exceeding 117 million crowns, which was caused by a global pandemic and the associated closure of branches.
But Orsay is not the only fashion brand to get into trouble in recent years. The French fashion chain Promod also gradually closed its Czech stores. He operated about two dozen of them here.
Sales in the financial year 2019/2020, sales fell by 18 percent to 164.6 million crowns. Profit increased by 2.4 million crowns, but due to further developments, he stated in the annual report that the coronavirus pandemic has a significant effect on its turnover.
The French clothing network Camaieu also ended up on the Czech market in 2020. Last November, it went bankrupt. The Czech brands Pietro Filipi and Kara also went into insolvency due to covid.
There is a lot of competition in fashion
“Arrivals and departures take place all over the world continuously, not only on the Czech market in the past period,” says Jan Kotrbáček, head of retail space rental for Central and Eastern Europe from Cushman & Wakefield, for the online daily Aktuálně.cz.
“Of course, the last two years marked by covid restrictions have not added much to the strength, but this period will also bring winners in addition to the losers. These are usually the ones who can best adapt to the situation,” he continues.
According to him, companies must respond mainly to gradual changes in customer behavior. “The key to this is constant innovation, investment in digital sales and communication with customers,” adds Kotrbáček.
According to Cushman & Wakefield, a total of 14 brands left the Czechia the year before last. Kotrbáček believes that their strategy did not work on the Czech market.
On the other hand, 12 brands from the fashion industry entered the Czech Republic last year. These were, for example, the brands HalfPrice, Versace, Modivo or Primark, which is known for low prices.
“The June opening of the first and largest Primark store in the city center in Central and Eastern Europe on Wenceslas Square in Prague was the most significant entry of a new brand in the family fashion and accessories segment into the local market – not only this year, but over the past ten to fifteen years,” Kotrbáček recalled.
“The last similarly significant arrival was the opening of the H&M store in 2003, before that Zara, C&A, Marks & Spencer or New Yorker, for example,” he added.
However, Primark, which also did not escape the coronavirus pandemic in the world, plans to open a second store in the Czech Republic this year, in Brno. The brand is also to enter the Slovak market.
Video: “I’m lifting. I want to compare it with Dresden,” people confided at last year’s opening of the Primark store in Prague.
“I’m curious. I want to compare it with Dresden,” people confided at the opening of the Primark store in Prague. | Video: Kristýna Pružinová
–
–
