Dallas, TX -- (SBWire) -- 11/18/2011 --ReportsnReports.com adds Euromonitor International Research Report “Apparel in Romania’’ to its store.
The latest research on Romania’s Apparel market says Romanians become more cautious with regard to spending and H&M to enter Apparel in Romania. Get your copy of the Apparel industry report for Romania.
Poor evolution of local apparel producers continues in 2010
The economic recession harshly hit local manufacturers of textile products and garments in Romania, as lohn agreements became less reliable, prompting many small operators to cease trading. Companies were forced to adapt to the new conditions and to create and develop private label products while significantly investing in training personnel. Labour migration and the high cost of labour prompted some companies to rely on Chinese workers while others invested in technological innovation in order to make production more efficient. In addition to administrative problems, local players have had to face unfair competition posed by large international apparel retailers, with little, if any, support from the authorities.
Recession fails to damage local potential
Despite an increase in the VAT rate in 2010, to 24%, major layoffs and cautious consumption among consumers, fashion enthusiasts had various reasons to rejoice in 2010, as various large international fashion retailers announced their intention to enter apparel in Romania. Based on the assumption of economic recovery in Romania, fashion retailers seek to buy or rent outlets in prime locations in order to take advantage of the favourable low prices. This has also been boosted by plans to create additional new shopping centres.
Focus on promotions in 2010
Despite the negative effects of the economic downturn demand for luxury items in apparel in Romania managed to remain impervious, as these products are targeted at high-income consumers. However, over 2009 and 2010, low- and middle-income consumers benefited from regular promotions and often price cuts, which helped to stimulate demand for non-luxury products. The growth potential for apparel in 2011 remains low, owing to the difficult economic circumstances however apparel is expected to be characterised by relative stability and increased predictability.
H&M to enter apparel in Romania
The entrance (which was confirmed in 2010) of H&M, a leading international brand, in apparel, signifies an outstanding vote of trust in the growth potential of apparel in Romania. The financial power of large international chained apparel retailers represents a huge competitive advantage over domestic producers. According to trade sources, over the forecast period, franchising companies are also expected to officially enter apparel, offering strong American brands or brands from other retailers in Northern Europe.
Romanians become more cautious with regard to spending
One of the key features of the economic recession was the reaction of consumers and the effect on their purchasing. Consumers gradually adapted to the circumstances by reducing their expenditure and paying more consideration to the price-quality ratio. Moreover, Romanians became used to and increasingly keen on promotions. This prompted retailers to alter their strategies and change their focus. The increased competition expected in 2011, as a result of the entrance of new players, and economic recovery are expected to present consumers with even wider choices and to prompt companies to further improve their services and to focus on adding a little something extra to the shopping experience for consumers.
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ReportsnReports – Apparel in Romania