Three Sisters: how to manage different brands on the same market

Petersburg clothing company Melon Fashion Group owns Zarina, befree and Love Republic networks. How the business grows by 35% per year?
23.01.2015
Forbes
Origin source
Romantic quiet Zarina with Renata Litvinova - face of the brand, mischievous befree, advertised male stars - Andrei Arshavin and Gosha Kutsenko, sensual and glamorous Love Republic, unwound singer of the group "VIA Gra". All brands belong to the St. Petersburg "Melon Fashion Group". It is the only Russian clothing company managing three different retailers. The first brand developed naturally, the second has repeatedly changed its concept and positioning, and the third was created purposefully and clear patterns.

Result - revenue growth "Melon Fashion Group" in the last five years an average of 35% per year.

Now, more than 90% of items of clothing company otshivaet abroad, but once it was a major production base factory "Pervomayskaya dawn". In 1996, 50.6% of the shares bought Swedish company Kurt Kellermann. Factory owned three stores and the brand "Zarina". The new owner has added to her brand Kellermann.

Changes in marketing began in 2002, when the number of stores increased to ten, and the factory became a co-owner of East Capital fund, has agreed toiysya invest in $ 8 million.

The name "Zarina" rewritten from Cyrillic to Latin - Zarina. If at first "Pervomayskaya dawn" focused on shoppers aged 35-40, but now the emphasis is not on age but on feminine style and a good landing. "At the heart of the brand Zarina was always a woman engaged in work and family. It is important both that and another, and yet she loves to dress up, "- says Pauline Bakshaeva, CEO and minority shareholder" Melon Fashion Group ".

The portfolio of "Pervomayskaya dawn" there is another brand - ci mi, women's clothing in the romantic style. Together with Kellermann and Zarina decided to sell it under the umbrella retail brand befree. The first stores in Moscow befree appeared in shopping centers "Golden Babylon" and "Mega Teply Stan". The idea turned out to be a failure - the buyer loses, seeing an unusual combination of styles and collections. Zarina again began to sell separately. For befree stores was invented more brand business clothes Di Piu. She lived for a short time - before restructuring "Pervomayskaya dawn". In 2005, mfrodstvennye power were transferred to a subsidiary factory in the Pskov region, orders for tailoring began running in China to develop its own retail network created of "Melon Fashion Group". Another attraction of investors - Swedfund Fund - has allocated $ 5.5 million retail development.

From befree a multibrand network refused. "We understand that the buyers of the brand befree forget - because things in the closet hang under other labels," - explains Pauline Bakshaeva. Stamps Kellermann, ci mi and Di Piu «frozen», but clothing styles - casual, business and romantic - to save individual collections befree as a product brand. Target audience - girls 16-25 years old, in need of clothes for all occasions. Once all the cases, the stores befree, decorated in the style of the housing, have established these sliding wardrobes. Zarina also upgraded by ordering the collection of young designers. By Zarina at the end of 2006 the network operated 43 stores under the brand name befree - 50 (including franchises). Revenues for the first year increased by 37% to 344.7 million rubles, the revenue of the second - at 68%, up to 384.3 million rubles.

Zarina resorted to classical advertising, tWhile befree - the bright shares in accordance with the brand name. For example, shoppers are invited to participate in the "Experiment befree» in 2007: the clothes in which they had come to the stores, shredding scissors, and then handed over the strongest girls dress from the new collection.

If women's brands unwind with the help of celebrities, it is usually a woman.

By advertising befree attracted male stars. Spring-summer 2008 collection presented under the slogan "Score!" Footballer Andrei Arshavin. The collection quickly sold out, and brand awareness among the target audience has grown c 37% to 49%.

The successful experiment was repeated: autumn collection advertised trainers Zapashnye. "Soar skyward on a swing at the very dome of the circus, to extinguish the flaming hoop of fire extinguishers and instead drive the tigers in a cage handsome brothers - befree girl not accustomed to retreat in face of difficulties. Strong and weak, strong and gentle, it is always different. But always - a real "- so described marketers" Melon Fashion Group "concept posters Zapashny. Brand awareness increased by 5%, and saand at full price (without seasonal discounts) - up to 70% of the total number of items in the collection.

In spring 2009, a girl's dream in the image of Cupid personified actor Gosha Kutsenko, who recorded for the disc befree "You're not like everybody else." After a year on advertising posters in humorous encounters with "the girls befree» appeared brutal Aleksander Emelianenko - fighter in mixed martial arts. In befree stores at the same time there was also a men's clothing. Face brand Zarina in 2009 became the "style icon" Renata Litvinova. If revenues apparel retail in Russia in 2009, largely due to the economic crisis, fell by 8% (estimate Fashion Consulting Group), the sale of "Melon Fashion Group" increased by 43%, to 3.06 billion rubles. Not the least role in this played a snatch another company's brand.

"Brand Love Republic launched during the crisis, and all of us were asked if we had a good thought - says Pauline Bakshaeva. - But it was a really good point: the marketing activities of competitors did not show, but we are on a background of silence and took a shot. " The idea of ​​creating a glamorous brand appeared on one of the "brainstorming" in the company. Naztion Love Republic offered a network of ex-manager OGGI Arestova Anastasia, now director of the brand Love Republic.

In autumn 2008, "Melon Fashion Group" bought Taxi network (16 stores of women's clothing). Investors have allocated the group $ 20 million on the deal, Taxi rebranding and further expansion.
The third brand decided to make a deliberately sexy in the "conquest of temptation and seduction" concept.

"In Russia, the sensuality of dress theme plays a special role - says Daria Nuclear, managing partner of consulting Esper Group. - If the trend the last five years is weakened in favor of androgyny and even masculinization of women in the "premium" and "luxury" segment, the mass-market continues to dominate. "

In February 2009, in Moscow "Okhotny Ryad" on the spot Taxi Love Republic opened its first store. By design it resembled a boudoir in the black-white-red colors. "I was close to this style - relaxed, knowing his own worth and confident women do not doubt its success," - he said at the presentation of the singer Vera Brezhnev. The "Melon Fashion Group" did not disclose how much it paid, andher colleague "VIA Gra" Hope Granovsky for taking part in an advertising campaign Love Republic. According Bakshaevoy, it was "a little money." If so, they quickly paid off. In 2010, befree revenue (136 stores) increased by 14%, to 1.6 billion rubles, the revenue Zarina (118 shops) - 25%, to 1.25 billion rubles. A sale Love Republic (84 shops) - 79%, to 1.1 billion rubles.

Typically, the portfolio of brands is formed retailers and manufacturing companies to build its retail, develop a brand. In 2010, the "Melon Fashion Group" has added to its own brand and has a master franchise for the Spanish brands Cortefiel Group - Springfield (casual wear), women 'secret (underwear and indoor clothing) and Co & Beauty (accessories). With other people's brands company operated until 2013, when the Spaniards have decided to develop their own retail in Russia. More to the expansion of the portfolio of brands "Melon Fashion Group" has not experimented.

befree network operates in the saturated mass-market segment, competing with Western giants like H & M or such large Russian retailers as Incity. Analogues Love Republic has not appeared. AT 2012, the face of Love Republic became a supermodel Naomi Campbell, and the assortment has replenished collection of evening dresses Luxury Nights. Sales of the brand rose by 55% awareness among the target audience of close to 57%.

Glamorous brand continued to advance with the help of celebrities to come up with Zarina opposite course - to participate in the advertising attracted buyers ( "brand ambassadors"), as well as employees of "Melon Fashion Group". The campaign under the slogan «Zarina - are we" increased sales by 37%, brand awareness - to 71%.

What's more profitable to develop a brand or a little? 2013 "Melon Fashion Group" has finished with a gain 9.2 billion rubles and 519 million rubles profit to 586 stores in Russia, Ukraine, Kazakhstan and Armenia. Revenue and profit Incity in the same year amounted to 10.2 billion rubles and 316 million rubles respectively to 449 stores.

Trade marks in different price segments allows not to depend on a consumer audience, and somewhere to get more revenue, but somewhere - big profits.
The average price of a garment in befree - 1000 rubles, in the Love Republic - three times as much; average annual maMs on EBITDA from befree - 6%, from the Love Republic - 17%.

Every fifth store "Melon Fashion Group" franchise. In 2014, the company was going to open 170 new stores, but the plan is executed by 60%. "When the economy started to shake a little, we went out of the projects, which have seen the risks and were not sure that the shopping center will be filled or will in general", - explains Pauline Bakshaeva. But the five-year anniversary of the brand Love Republic the company has undertaken to update the stores in order to make commercial space is larger and brighter. In 2015, the change outlets Zarina and befree.

According Bakshaevoy, the company feels the pressure of exchange rates, but there is a plus - you can negotiate more effectively with shopping malls.

And marketing does not interfere with the economic situation: spring collection Love Republic will promote top model Irina Shayk.

"Such a beautiful shooting took place in the Canary Islands - a dreamy sigh, said General Director of" Melon Fashion Group ". - We can not wait that, what will become of our beautiful windows in February. "

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