Retail Major Marks & Spencer Launches First Store In Ukraine

KIEV, Ukraine -- Marks & Spencer, one of the leaders in retail trade in the UK, opened its first shop in Ukraine late this May.

Marks & Spencer print ads are geared towards a generation raised on "Sex and the City".

Opening of the new clothing store, located at the Komod shopping mall on the left bank of the Dnipro River, marks the continued march of Western retailers onto the promising Ukrainian market, where rising salaries and purchasing power have driven up domestic consumption steadily for several years now.

The Ukraine branch of M&S was opened as a franchise by Turkey’s FIBA Group, which owns the rights to M&S shops in Turkey, Russia and Ukraine. FIBA Group has opened eight M&S shops in Russia since 2005 on a franchise basis.

The company could have similar bold expansion plans for Ukraine, but officials did not respond to Post inquiries regarding such plans.

More than 15 million people in the whole world visit M&S shops every week. The Marks & Spencer chain includes 530 shops in the UK. The company’s 220 shops in 35 countries operate on a franchise basis.

The company’s shops located in foreign countries offer consumers stylish high-quality clothes, home products and high-quality food products. For the time being, Marks & Spencer in Ukraine will offer clothes, underwear, lingerie and accessories. Marks & Spencer goods are oriented mostly toward middle-class consumers.

Andriy Krivonos, head of the Ukrainian Franchise Association, said that the “launch of a new chain would not create a breakthrough on the market.” Nevertheless, the new chain will, like other retailers to follow, add something new to this fast-growing market, Krivonos added.

According to Krivonos, Marks & Spencer in Ukraine does not have any competitors in terms of shop format, since “no other chain sells clothes, underwear, lingerie and accessories under one brand.”

However, Marks & Spencer goods will experience competition from clothing brands represented on the market of Ukraine. Among these are Arber, Arber Woman, Voronin, and VD1.

Nevertheless, there are other retailers on the Ukrainian clothing market who pose some form of competition for Marks & Spencer, though being as they are, they cannot be considered Marks & Spencer’s direct competitors. Most of them operate on a franchise basis as well.

Maratex Ukraine, which runs its Esprit and Peacocks shops on a franchise basis, has been operating in the country since 2002.

Argo Trading Network Ltd. is considered to be the pioneer in franchising on the Ukrainian clothing market. The company was founded in 1991 as a joint venture between Belgium, Ukraine and Israel. Over the years, the company has opened many stores on a franchise basis in Ukraine. Some of the company’s well-known stores are Benetton, Adidas and Mango.

A Ukrainian company, MD Group, has been operating on the market for several years already. Its stores, like Tommy Hilfiger, Accessorize, and Sasch, among others, also operate as franchises.

A Ukrainian company Helen Marlen Group, which represents more expensive clothing brands, like Yves Saint Laurent, Gucci, Burberry, Roberto Cavalli, also operates its stores under franchise agreements in Ukraine.

A Polish company LPP S.A., which operates a chain of clothing stores called Reserved, is among the more recent players on the Ukrainian clothing market. The company entered the Ukrainian market in 2003. Reserved stores in Ukraine are a direct investment by the parent company in Poland.

But more competition is expected to arrive.

Krivonos predicted two to four new retail chains would enter Ukraine each year within the near term.

“It is difficult to predict who will come here next, since there are so many such companies in the world,” Krivonos said.

However, European chains will be more active on the local market than American or Asian companies, since Ukrainian people are closer in their mentality to people living in Europe.

Franchising as a form of company operation is becoming more and more popular in Ukraine.

“The Ukrainian market of franchising is very developed,” Krivonos said, adding that it is one of the most dynamic in the region. As to the clothing market, he noted that “it has become popular to sell clothes here.”

Source: Kyiv Post