MOLDOVA. Franck Arif and his team at Le Bridge Travel Retail have a big vision for duty free and luxury goods in the tiny country of Moldova, which lies between Ukraine and Romania in the east of Europe.
The company, Europe’s newest duty free concessionaire, has just embarked on a series of store openings on the Moldovan frontier with Romania, beginning with Leuseni. That will be followed soon by outlets at Sculeni, Cahul and Costesti, with one further store to open between March and June next year at Giurgiulesti. In the coming days the retailer also expects to open its first store at Chisinau Airport, which serves the Moldovan capital.
At a grand opening for the operation in Chisinau last Friday [click here for the first part of our coverage from last week], Arif told The Moodie Report: “I believe Moldova will one day become a major market for luxury goods. It lies at a crossroads of 100 million people in Europe. Duty free is a new beginning for us – one that gives us the opportunity to link together with the world’s biggest brands - but we want to be present on the domestic market too as a major force in luxury goods. That is our big long-term aim.”
The company is keen to cement a reputation with brand owners for high-quality retail executions, for transparency and for top-class service – qualities that Arif said it has employed since he created the Le Bridge Corporation [Arif himself is half-Lebanese, half-French, with a background as an architect - Ed] more than a decade ago.
“We are not inexperienced in business, even if duty free is new to us,” he noted. “We have over 1,000 staff here across our operations, we want to create an environment of trust with our suppliers, and we hope their experiences with us will underline that trust and build good relationships.”
Le Bridge’s traditional business lies in the manufacture and distribution of dairy products - including ice cream and butter - as well as logistics and the distribution of some leading international brands such as BAT, Imperial Tobacco and P&G in Moldova.
Neighbouring Romania had been a key market for the company’s products until it joined the EU, and access to that market for its dairy goods was restricted.
“We went looking for new opportunities and that led to the Middle East and Africa, where we do good business today,” said Arif. “But we also looked to diversify – and when the tender for the border shops came along in 2008 we were very interested.”
Le Bridge won the border business, and followed that success by securing a concession at Chisinau Airport [where it will operate alongside well-established local retailer Dufremol, supplied by Gebr Heinemann - Ed]
Healthy competition
Arif said: “We respect the competition, and they have a partner [Gebr Heinemann] who I also respect very much. Fair competition is healthy and it challenges everybody to become better.
“But we want to walk our own path, to take a different approach, we want to be independent and to deal ourselves with brand owners. It’s important, as we try to become a recognised name in luxury on the domestic market, that brands come to trust us and deal directly with us to see how we operate.”
He added: “Having both the border and airport business makes a difference in our conversations with suppliers. The airport business adds some prestige to the rest of the operation and we realise, and want to prove to brand owners, that we can product a high quality of investment, of merchandising, of service. And we hope that our investment – which is €3.5 million in these stores – helps those brands see that we are serious, that we believe in the dream of a luxury market for Moldova, and that other brands will join them.”
Arif stressed that this was not a short-term business opportunity. He said: “If we wanted we could have introduced a very basic duty free business, with kiosk-style stores, but we wanted to enhance the environment and make our expression a luxury expression. That’s why it has taken 18 months and a lot of investment. It’s a business for the long term.
“We know this will be a new experience and that we will have to make changes and improve as we go along. But we are prepared for that.”
Although liquor and tobacco are the dominant items in most border businesses, the breakdown of sales will be different at Le Bridge’s stores, claimed Arif.
“We are interested to see how fragrances, casual fashion, toys, watches and jewellery will perform at the border, alongside the traditional categories,” he said. “It’s quite a big statement to change the way the business is done, and we want to be different.
“It’s also not all about pricing either, although that is important, especially between Moldova and Romania. Tobacco will be more expensive than the Moldovan domestic market, but we will be stocking international brands that are not available here, and that is the attraction. Local products will be important too – wines are a big business with a strong heritage in Moldova. They deserve a nice environment.”
From confectionery to spirits, the retailer wants to project a modern, upscale look (pictured is Le Bridge's Leuseni store)
Potential for luxury
Although Moldova is the poorest country in Europe, and has a population of just four million people, Le Bridge believes that the potential for luxury goods is high.
Arif noted: “Moldova doesn’t have a luxury market at the moment, of the kind that one would recognise elsewhere. This is still a small country, still a poor country, but in the top 10% of the population – still a number exceeding 400,000 – there is the purchasing power for luxury goods. Duty free has in the past helped kick-start many markets for luxury brands, and it can be the same here.”
He also underlined his faith in the Le Bridge team of well educated Moldovan nationals. Arif said: “I believe in the people here; they work hard, they are clever and well organised. I believe very much in Moldova. We are also creating work – 25 to 30 jobs in each border location - and these locations are not close to any major cities and there is not a lot of work, so we are proud to be able to create something new, and we have been embraced by the authorities in each of those places.”
Arif concluded: “I qualified as an architect, and business is also a type of architecture, the attempt to create something meaningful and lasting.
“We have a vision to be this great crossroads in Europe and a home for the luxury goods business, like a Dubai for this region. Of course there will be many who doubt this. It’s just an idea right now, but like every idea you have to promote it, nurture it and manage it. It needs a lot of people, a lot of support, a lot of political will too to make it happen.
“But every big brand began from something small, and from someone who had the germ of an idea, often by chance or accident. Everything good that happens begins as an idea. And this is a great first step.”
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Source:moodiereport.com
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Source:moodiereport.com
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