Fashion & Franchising

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Fashion & Franchising
Data of franchising in fashion industry testifies that over 60 % networks of known trademarks are organized by a franchise principle. In nonfood trade the greatest share of franchise market in 2008 was occupied with clothes and footwear franchises (51 %). In comparison with 2007, there was registered a strong jump in development of clothes trade which made 40.5 %, and footwear trade – 84.6 %[1]. Let's consider experience of large and all known franchising chains occupied in fashion industry in the same price segment (middle class) and working in international markets: Russian corporation Sela, American corporations Mexx and Gap, and Italian company Miss Sixty. Based in 1991 Sela is the leader of Russian trade market of fashionable clothes in average price segment and is the largest retail network of clothes and accessories in Newly Independent States. The first shop Sela opened in Russia in St.-Petersburg in 1997[2]. In 2008 Sela totaled 550 shops, and the company turnover in 2007 was 220 mln. dollars, and for 5 years the corporation turnover grew in 4,5 times[3]. Today not less than 90 % of Sela shops work using the franchising system. Sela cooperates with 300 partners in 9 countries including Ukraine, Estonia, Kazakhstan, and China[4]. The co-owner of the company considers it is extremely important that Sela formulated corporate principles of franchising from the very beginning[5]. Standards of trade and financial policy were accurately registered. The cost of initial purchase of goods is 350 dollars per sq. meter. Investments into franchisee shop are assumed from 400 to 500 dollars per sq. meter. It is possible to open a shop with area from 100 to 250 sq. meters[6]. Average term of investments return is 3-4 years[7]. Let’s discuss foreign franchising chains and begin with American. The first Gap shop was opened in 1969 in San Francisco. The company is a leading international specialized retail...
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