The political and economic crisis yet again strike the already weakend nation of Romania, ever since the leftist coailition took over in June, and a fierce battle to impeach the current president belonging to the opposition party PDL went on.
CPP Luxury Industry Management Consultants Ltd estimated a 20% drop in buying power and a 40% drop in the number of wealthies. Sales in the first half of 2012 were 30% less than as compared with the same period last year throughout all the fashion and luxury sectors including accessories, jewellery and watches.
In the first half of 2012, Gucci, Moschino, Dunhill, Valentino, Emporio Armani, Hugo Boss and Burberry have performed the worst. Louis Vuitton on the other hand is leading but the turnover is very unlikely to reach the last year's record of 5,1 million euros.
Most of the mono-brand stores such as Ermenegildo Zegna, Canali, Gucci hardly reach a turnover of 1,5 million euros each. The pressure to reduce costs and improve profitability, following the crisis, has lead luxury retailers such as Sodo Migliori, the franchisee of Gucci for Romania, to close down some of its watches and jewellery stores. The situation is even worse in this sector as it is not only affected by the economic and political crisis but also by sales of counterfeits and preference of the luxury consumers to shop abroad.
The uncertain economic and political situation in Italy and Spain is also very likely to add on to the Romanian crisis. One of the major reasons why opening the first mono-brand stores for the major brands like Prada, Hermes, Chanel, Ralph Lauren or Tiffany & Co. is out of question before 2014.