Rob Whitford -
A Romanian company is a surprise winner in the region's bra wars
In the prettiness business, you can't get much prettier than lingerie. And one firm that's sitting pretty right now is Jolidon, lingerie and swimwear company based in the Transylvanian town of Cluj-Napoca.
A start-up established by Gabriel Cirlig back in 1993, it had just 10 people on the payroll in its first year. Thirteen years on, Cirlig's still in charge, as owner-manager, but revenue hit 20 million last year, the firm employs 1,350 people and it has three subsidiaries outside Romania. Pretty good going. And pretty refreshing, for Jolidon has avoided the standard route of garment-makers in the region that of low-margin contract production for big foreign firms followed, eventually if at all, by tentative brand development. Cirlig's firm has been producing its own brand - and only its own brand - from the start. It's built that brand up at home and recent foreign expansion has also been on the basis of that brand.
When Jolidon started the firm, he had just one lingerie collection. Now there are eight, all designed in-house, all renewed twice yearly and all aimed at clearly defined market segments.
That's necessary, says Cirlig: nowadays foreign and domestic brands abound, Romanian women love novelty, and lingerie is most definitely a fashion item. Quality is vital too: presumably that's why Jolidon imports its fabrics from traditional European suppliers in Italy, France, Switzerland, Austria and Germany.
And price? That matters in Romania, says Cirlig, but Jolidon's formula is quality at optimum price. When he talks of competition, he mentions foreign firms like Triumph, Franco Rossi, and Cotonella, or locals like Uniconf and ID Sarrieri.
Certainly not the cheap, unbranded Chinese goods that worry some.
Their quality is low, so they don't affect Jolidon sales, according to Cirlig.
Jolidon has emphasised its own shops as well as its own brand. The first Jolidon shop outside Cluj was opened in Timisoara in 1997, the first in the capital Bucharest in 1999. Numbers really began to grow from 2002, with 15 opened in 2002-2003 and another 20 in 2004-2005. The current score is 47 shops, the year-end target 70.
All of which has been helped by the recent proliferation of malls and galleries, which have proved good places to put Jolidon shops.
The shops accounted for 23% of Jolidon Romania's total revenue in 2005 and 35% of domestic sales. But their importance goes beyond that. They marked the beginning of a project to establish a close relationship with clients. recalls Cirlig. They not only kept Jolidon in touch with his customers' needs, but they also helped educate them, permitting Jolidon to promote new products and ideas.
Other outlets - 65% of domestic sales in 2005 - haven't been neglected. In May 2000, Jolidon began to deal not just with department stores, but also with cash-and-carry outlets and hypermarkets. By April 2001, it was cooperating closely with Metro, Carrefour, Cora and Selgros.
All this expansion of sales and distribution has had to be matched by output expansion.
In 2001, Jolidon took a big step forward by buying premises that had belonged to communist-era giant Clujana Footwear. Then in 2004, Jolidon acquired controlling shares in Argos, another Cluj-based company with 800 employees and a 60-year tradition in swimwear and lingerie.
That made Jolidon the largest company on the market, gave it a useful brand which has retained its identity as one of Jolidon's collections, and yielded some nice real estate in a town where premises have become increasingly expensive.
This all means pretty impressive figures:
from 2 million in 1999 and 5 million in 2001, revenue jumped to 14 million in 2004 and 20 million in 2005. And, while reliable market size figures aren't available, Cirlig reckons Jolidon has a 40%-50% share now.
With such a large domestic market share, the company is looking increasingly outside its home market for growth. Exports accounted for 34% of its revenue in 2005 in a broad range of markets: Germany, Switzerland, Belgium, Slovenia, Croatia, Poland, Russia, Ukraine, the US, Canada, Japan, South Africa and Israel.
First came Jolidon Hungary in 2000, which is logical given that it is a neighbour.
But Jolidon has also ventured into two of the heartlands of fashion. Jolidon Italia was set up in 2001 - in Milan, no less. And in 2003, it was time for Jolidon France, with a shop in Paris (a second, in Lyon, followed in early 2005).
Paris - la capitale de la Creation et de la Mode, sighs Cirlig, recalling France's long tradition of making lingerie. So France represents a special challenge, and one Cirlig is taking very seriously. Jolidon takes part regularly in France's most important fashion events, and also advertises and features in key specialist magazines such as Intima France and Creations Lingerie. Most strikingly, in 2006, Cirlig plans to set up a chain of 20 franchised shops in France - only slightly fewer than those planned for Romania itself.
There are new markets to be developed, too. In Russia and Ukraine, Cirlig sees much potential there. Then there's China which is, well, big. Jolidon recently took part in the first Shanghai Mode City fair, aimed at the elite female market.
The future certainly looks bright, especially when one considers that Jolidon is now receiving the ultimate compliment of having its products counterfeited. Independence is an appealing virtue and a coals-to- Newcastle venture like selling lingerie to the French can only be admired. But some would argue that Jolidon risks over-committing itself, concentrating resources on a dream project that might better be deployed elsewhere.
Boosting brand awareness in a market like France is, after all, neither easy nor cheap, regardless of how chic your lingerie.
We wish Gabriel Cirlig well, however: success would be pretty well deserved.
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