Takko Fashion: 'No plans to slow down our expansion in Russia'

INTERVIEW_ German clothing retailer Takko Fashion continues its expansion in the Russian market and plans to open five more stores by the end of the year. And in 2015, the value fashion retailer will even head to Russia's east. In an interview with FashionUnited, Konstantin Arkhipov, CEO of Takko CIS, talked about the company's plans and top priority in this territory, namely raising brand awareness in Russia.

FashionUnited: The German brand Takko Fashion has been on the Russian market for a year and a half now. What has changed and how has the company expanded its business? How many stores are open today and what schemes do they operate under?

Konstantin Arkhipov: Our network of stores is growing rapidly. Today, we are operating 52 stores in Russia and have no plans of slow down our expansion. By the end of the year, we will be opening another five stores. None of them are franchises but owned by Takko Fashion, which is headquartered in Germany.

What are your plans for the development of the brand in the Russian market and what are the brand's priorities?

Our priority is to increase brand awareness in Russia. Although Takko has about two thousand stores in Europe, in Russia the brand is not yet as well known as the stores of our, let's say, Swedish or Spanish competitors. But some of our landlords already consider our stores anchors in their shopping centers.

Which countries does Takko Fashion plan to expand into next?

While expanding in Russia, there is still a lot of work to be done, so it's too early to say what the plans in other countries will be.

The ruble has been falling. How does this affect your business?

It's no secret that in times of crisis, discounters fare better than other formats, so in those times we observe a growing demand for our clothes.

In addition, we have a team of experienced professionals with prior experience at major chains who have experienced more than one crisis, so we feel quite comfortable.

Have the plans for the brand development been adjusted in view of the country's economic problems?

No, we have not adjusted our plans for brand development in Russia. We stick to the assigned tasks and plan to increase our network of stores to the east next year.

How would you assess the Russian market for fashion retailers at the moment? Some companies are scaling down their activities or are withdrawing from the market, others are waiting and watching, for example mass market and luxury brands. What is your strategy?

There are various reasons why retailers are experiencing problems, which do not necessarily need to have anything to do with the current crisis. Problems can include anything from inefficient management to quality problems of the goods. As mentioned earlier, we do not plan to slow down the pace of our expansion.

In which Russian regions do you plan to open stores? And how much investment goes into launching a store?

Currently, we have plans to open stores in the region around the city of Arkhangelsk in the north west, Tatarstan in the south west, and in Siberia. In addition, we are strengthening our presence in cities where we have already opened shops and are focusing on locations in large shopping centers with good traffic.

Regarding the size of investments – this is something we would not like to comment on.

Do you feel that consumer spending has desclined? Has the average amount of money spent in your stores decreased?

During times of an unstable ruble, buyers become more cautious and make more informed decisions when buying anything. People are afraid to spend the extra money, so there are fewer spontaneous purchases. This, of course, affects the average amount of money spent. We are seeing a slight drop in revenue, but there's no need to panic about it.

Galina Utesheva

Photos courtesy of Takko Fashion