Benetton Group returning to Kazan with its own retail

Italians are betting on renting space in popular shopping centres and predict up to three retail outlets for Kazan in the future

As it became known to Realnoe Vremya, Benetton Group intends to strengthen its position in the market of Kazan. As we wrote earlier, the Sisley brand is returning to the city through a partner. In October, a Benetton store opened in Mega, but the city can “digest” several more outlets, the company's Moscow office believes. Meanwhile, experts remind of serious miscalculations of Italians with the choice of location and design during the launch of the first stores of the chain in the capital of Tatarstan. Will they avoid these errors when launching a new store in the city's largest malls?

“Kazan can present two or three Benetton stores”

In October, after a long break, the United Colors of Benetton store returned to Mega, while the official website of the mall chain for some reason tries to convince its visitors that this is the first store of the Italian brand in Kazan, although the facts suggest the opposite (but more on this later).

“Kazan is an important city where the major international brand should be represented, and we are no exception," Nizami Gadzhiev, commercial director of Benetton Russia, commented on the launch to Realnoe Vremya. “Since the loss of the partner store in 2017, we immediately set the goal to return to this city. We finally managed to find the right place for the store, and we are glad to be back. Our expectations are very positive, and we can already see that this is mutual in the first few days of our work.”

Speaking about plans for the development of the chain, the interlocutor of Realnoe Vremya confidently stated that Kazan can “adequately present two or three Benetton stores”.

“At this stage, we plan to analyse the dynamics of the development of the first store in order to finally determine the development strategy in the city," said Nizami Gadzhiev.

Second coming

Kazan's acquaintance with the brand began in the early noughties. The first United Colors of Benetton store opened in 2001 at 50 Bauman Street. It was launched by local entrepreneur Aydar Gataullin. The businessman even managed to meet with the founder of Benetton Group, billionaire Luciano Benetton, who came to evaluate the work of franchisees in the Volga Region in 2006. Later, a Sisley store operated at the same address on the main pedestrian street — the brand is also owned by Benetton Group.

The store on Bauman Street ceased to exist in early 2013. The brand manager of the Sisley Moscow office, Artur Zakharyan, previously told Realnoe Vremya that one of the reasons for the closure “was not the economy at all, but the location of the store”: “The thing is that people prefer to walk on the street rather than buy. But retail outlets then just moved to shopping centres, where people go shopping purposefully.”

Indeed, the United Colors of Benetton store in the Kazan Mega shopping centre worked much longer, but it still closed in 2017.

“It wasn't the location, it was the store itself”

Re-opened this year, the store in Mega is launched in a new Light Colors format, developed by the Benetton Group design team in collaboration with architect Tobia Scarpa. According to the company, this is the sixth United Colors of Benetton store in Russia presented in this concept.

Experts believe that now those responsible for the development of the brand have chosen the right course, since previously there were plenty of complaints about the design of the store in Mega (especially in comparison with the three-story store on Bauman Street).

“If we talk about the reasons for closing the store in the shopping centre, it was definitely not the location, but the store itself — it was deep and dark, with an unpresentable layout, the collections themselves were very poorly selected," says Dilyara Aizatullina, senior broker at A-Development. “Maybe they should have changed the location of the store. As far as I know, in Mega, it is possible to do this — just get in the waiting list for moving. But this, again, is not the main factor.

Commercial real estate expert, CEO Diana Nurgalieva agrees with her colleague's opinion and believes that the reason for the closure in Mega is “clearly not related to the choice of location”. In turn, the authorised representative of the Guild of Managers and Developers (RGUD) in Tatarstan, Yelena Stryukova, who has already visited the reborn Benetton, calls the new design “a breath of fresh air”.

“Now a new franchisee is coming or the head office is opening the outlet itself”

Recalling the story of the store on Bauman Street, Yelena Stryukova stressed that it was located in the brand's own building.

“As in many other cities, Benetton in Kazan owned a mansion on the central pedestrian street. In the 2010s, with the mass construction of shopping centres, fashion brands began to switch from the street-retail format to large shopping centres. The situation with their stores was very similar in Samara and Nizhny Novgorod," says Stryukova. “For European cities (the brand itself comes from Italy), this is not a typical development, where in every major tourist city you can find a huge, sometimes two-story store on the busiest streets in the centre. Perhaps, this redistribution of customer flows was partly the reason for the closure of the brand's stores in the city. It took time to regroup.

“Presentability, relevance, and visual appeal of the store are important for people. We can remember Ekonika, which one couldn't look at without tears — now it's just great. There is Russian brand 12 storeez, which appeared as a “capsule” and now has reached the level of Massimo Dutti. The brand just needs to be served tastily and then sell it," agrees Dilyara Ayzatullina.

In her opinion, the sad fate caught up with the store on Bauman Street because of the poorly chosen location: “Back then, people were spoilt for free parking, and it was difficult to drive directly to the store. It was possible to approach only from Bauman Street, Dzhalil Street is not a passing street at all, and in general this intersection was not busy. The location was a dead end.”

In general, commercial real estate expert Diana Nurgalieva believes that Benetton “has long lagged behind modern realities and, as a result, fell in sales and could not compete”.

“The reason for this could be the franchisee, who caused the store to 'deflate'. Now a new [franchisee] is coming, or the head office has decided to open in person," Diana Nurgalieva suggests.

In turn, commenting on the closure of the old stores, Commercial Director of Benetton Russia Nizami Gadzhiev said that this happened “due to various financial circumstances”. Today's store opening is “opening your own retail, which means a more stable financial position”.

The return of “stepbrother”

Benetton Group is also returning to Kazan the “half-brother” of United Colors of Benetton — the Sisley brand. Entrepreneur from Tatarstan Adel Yagudin told Realnoe Vremya that he signed an agreement with the Moscow representative office of the company. The store will open with the launch of the new Kazanmall shopping centre, and it will also be in a new concept — Rich & Raw.

For Sisley — this is also a return to the city, the first coming took place more than 10 years ago. The monobrand store of the brand opened at the corner of Bauman and Astronomicheskaya Streets, at the place of “registration” of the Benetton brand, then moved closer to the Kremlin, where the higher brands — Max-Mara, Marina Rinaldi — were concentrated at that time. However, in the second half of the 2010s, Sisley stores began to close in different regions of Russia.

By Lina Sarimova