Alexei Grishko, the LC Waikiki: the H&M entry in Ukraine will not be critical for us

The LC Waikiki regional director in Ukraine told us about how the company succeeded to gain a foothold in the market during the crisis period, why the first Outlet format store opening and further development plans.

The Turkish clothing brand LC Waikiki entered to the Ukrainian market before the crisis − in 2013, however, the difficult economic situation in the country did not prevent by the developing company. While many foreign brands working in Ukraine have revised its development plans and refused to open new Outlets, the LC Waikiki continued to invest and develop, new stores opening not only in Kiev but also in the regions. Now the LC Waikiki chain has 17 shopping facilities in Ukraine, and more recently the Turkish brand opened the first Outlet store in the country. The LC Waikiki regional director in Ukraine Alexei Grishko told in an interview RAU.ua. more information about this opening, as well as how the company succeeded to gain a foothold in the market during the crisis period.

Discounts for all

− Why will you decide to develop the Outlet-format in Ukraine? Are there any stores of this format in other countries?

− Until this time, Outlet-stores were represented only in Turkey and Kazakhstan − those countries that traditionally generate the largest turnover and accordingly − the greatest number of seasonal balances. Considering the LC Waikiki rapid expansion in Ukraine, we have accumulated enough commodities for three years, which was taken to the warehouse because of off-season. We decided that it is better to give our customers the opportunity to purchase this product at reduced prices than we will pay for its storage. We decided to open the Outlet-store here yet at the negotiations stage with the New Way shopping center and having analyzed the commodities leftovers in the warehouse.  Many of LC Waikiki brand fans are residing in the vicinity of the Osokorki-Pozniaki-Kharkov metro stations. Considering the great demand for our products, we plan to open several more stores in this Kiev part in the near future.

− Are you satisfied with the Outlet-store work first results in the New Way SEC?

− As a rule, the store demonstrates good performance since the official opening − from the date that we announce via radio, billboards, social chains and other marketing activities.

We started the store in the New Way SEC two days before the official opening, and the queues at the box office was on these two days the only difficulty for us.

− Do you intend to open Outlet’s format stores in Ukraine in the future?

− After two days of this store work, we think where to get the leftovers for the second Outlet (laughs). Seriously, I do not rule out that this format more stores will open in the future, including − in the regions. Already now we have three stores (in Chernigov, Zhytomyr and Zaporizhzhia), in which commodities are presented from past seasons. However, it cannot be called full Outlets, because there are the discounted goods in its not more 20-30%.

The schedule ahead

− What are the strategic plans for the company development in Ukraine?

− The company Ukrainian division all plans are coordinated with the LC Waikiki owners and are built for the period until 2023. By this date we must have a 60 stores minimum. However, already now we are moving with this schedule ahead. Only in March this year, we opened three new retail facilities in Kiev, Dnieper and Krivoy Rog. Considering that there is a trust credit and full support from the company head office, I do not see any barriers for stated purpose fulfillment.

−Does the LC Waikiki’s head office is allocated the investments for the chain development in Ukraine?

− Earlier development really took place due to main office investments in Turkey. After all, in crisis times, it was quite difficult for us to rely on own resources. However, the crisis is an opportunity time. The LC Waikiki became the leader in the crisis in many countries − in Turkey, Romania, Bulgaria, Kazakhstan. In Ukraine, we have made a bet on the same strategy. But starting from this year we will develop at our own current assets.

− The LC Waikiki very quickly scales business in Ukraine. How do you succeeded to interest developers in opening own stores?

− First, many already know the LC Waikiki in Ukraine.

Just like McDonald’s generates a constant visitors flow to the food court, so and our stores generate a traffic lot in the shops gallery.

International retailers, who are now actively investing in Ukraine and developing stores in the same format, can be counted on the one hand fingers. Considering that we always strive to agree on fair and mutually beneficial terms with the developer, so they also to meet us halfway.

− Since 2013, many foreign companies have suspended development in Ukraine. But recently there has been an increase in talk about the H&M entry in Ukraine, the Turkish brands Koton and De Facto. How does its entry in the country will affect the Ukrainian fashion-retail and how does the LC Waikiki intends to respond on the competition tightening?

– Indeed, starting in 2014, the Ukrainian market was unstable, and many were afraid to invest in the country. Now the foreign brands interest to Ukraine testifies that the market comes to life. However, the LC Waikiki succeeded to take advantage by the crisis period in full. We managed to gain a foothold in Ukraine, the brand has a loyal customer’s lot. Therefore even the H&M entry will not be critical for us, and the Turkish retailers output will even be at hand.

If the same brands Koton and De Facto will open stores directly in our outlets front, we will be able to work in synergy and attract additional the visitors flows.

Moreover, the LC Waikiki competes with these brands only for some commodities lines.

Strong Regions

− You spent two years developing the brand in Belarus before joining the LC Waikiki Ukrainian division. What do you remember the doing business nuances in this country? How do you think, how this market is promising for Ukrainian retailers?

− Many companies are afraid of incomprehensible Belarusian legislation and state interference in the international companies business. However, if the company conducts the business is absolutely transparent, so there should be no fears. In general, the competition in the Belarusian fashion market is much smaller than in Ukraine. The LC Waikiki entered the Belarusian market in 2014, and before the 2015 crisis, which was triggered by a collapse in oil prices; the only headache was for us a new product timely delivery. It is clear that the situation worsened during the crisis, but the market continues to develop.

Now we have 12 stores in Belarus, it is all profitable, so I see no reason not to invest further.

I can also note from the market peculiarities that the main retail Outlets in Belarus are located in Minsk, so the metropolitan shops trade much better than the regions.

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