Financial crunch claws up luxury market in Romania

International financial crisis that led to currency sways and shut down of real estate market, has triggered a decline in sales volume for luxury products and services in Romania in July – September 2008 interval.

The sales dropped 5-8% from similar period of last year, reads a research framed by CPP Management Consultants, central and eastern European company specialized in luxury industry.

“Romanians with financial possibilities are more cautious when it comes to buying certain products and services. Therefore, acquisitions are delayed”, CPP Management Consultants representatives stated.

Luxury car makers have been caught up in the turmoil, feeling the full impact, followed by watches market and accessories markets. Furthermore, interior design products and luxury furniture items registered a visible setback in sales, in July-September 2008 interval.

Although the entry of Ferrari and Bentley on the domestic car industry heralded a growth of luxury car sales, according to CPP, the entry of these brands was firstly for the sake of image, adding brands’ desire to ensure highest quality services to Romanian clients.

One of the fields that have not been hurt by the crisis is jewelry market, Romanians being aware of the safety of investments in gold and precious stones. Another field not affected by the crunch is that of luxury vacations and trips, Romanians allocating major budgets to this kind of activities in 2008 as well.

Furthermore, this trend is noted in the international context, the exotic destinations registering even growth in demand.

CPP Management Consulting representative keep the gloomy forecasts for the following three months of 2009, estimating a 5-7% decline in luxury products and services sale in the winter season.

On long term, investments in franchises of famous international brands proved to be successful. CPP continues in identifying local partners for franchise for a set of international brands that are not yet on the market. Luxury brands pending franchise contracts are Dolca Gabbana, Prada, Valentino, Yves Saint Laurent, Hermes.

Another field that seems to arouse interest is bio products segment, as several international brands laid eyes on Romania.

CPP Management Consultants Ltd is one of the biggest companies specialized in luxury industry.

Translated and adapted by Camelia Oancea.

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