As if it wasn’t expensive. Luxury brands are doing well in the Czech Republic, Chanel has also opened a store

Paradoxically, the current Russian one can also contribute to the development of branded stores in the Czech Republic war in Ukraine. Although it initially paralyzed the merchants, they quickly decided to adapt to the changed situation. “For example, many of them have closed a large number of stores in Russia, but they will certainly try to replace this market, for example in the Czech Republic,” stated Kotrbáček.

Considering that foreign companies open new stores mainly in the second half of the year due to the Christmas season, it is expected that the number of new brands this year will match last year’s level. At that time, a total of 38 entered the Czech market.

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Most new brands opened their stores in Prague this year. These are mainly clothing stores, specifically from the companies American Vintage, Balenciaga, Chanel and Jacadi Paris. Newly, Czech customers can also buy Teilor jewelry, HP electronics, or household equipment and accessories from Home&You, Materasso, and Tefal. “On the other hand, brands such as Iceland, Nordsee or the traditional sports chain Hervis left the Czech market,” recalled Jan Janáček from the real estate company CBRE.

The fashion chain Orsay also faced problems. According to Forbes magazine, the collapse of its Czech stores in July was prevented by the takeover by the new owner, EMEA acquisitions.

The end of electronics and clothes in Lidl?

The German server, on the other hand, reported that the Lidl chain will drop electronics, dishes and kitchen utensils, tools, and clothing from its offer. And that’s because of problems with deliveries from Asia. However, the domestic representative of Lidl did not confirm this claim when asked by Deník. “At the moment, the supply is mainly affected by the disrupted global logistics chain and the resulting delay in deliveries,” admitted the chain’s spokesman Tomáš Myler.

Nevertheless, Janáček from CBRE sees the market situation quite optimistically. He considers the opening of boutiques of the luxury brands Chanel and Balenciaga in Prague’s Pařížská Street to be particularly significant. “We see this as an indicator that, despite the unprecedented growth of inflation, the Czech Republic remains a perspective destination for many global brands for their expansion,” declared Janáček.

However, some sales figures still do not inspire any optimism. According to Janáček, in particular, sellers in the field of sports, household goods and furniture saw a ten percent decrease in sales in the first seven months of this year compared to the same period of the pre-coronavirus year 2019. “On the other hand, brands from the electronics category are doing extremely well,” said Janáček.

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At the same time, rising inflation continues to threaten fashion entrepreneurs as well. Both workers in Asia and the extremely expensive transportation of goods by ship or plane as well as logistics, storage and distribution to stores are becoming more expensive for them. “Merchants must also take into account the ever-strengthening position of Internet platforms such as Zalando, About You or the Czech Zoot,” says Janáček.

Shopping as an experience

According to Janáček, if the economy falls into a deeper recession, traders will have no choice but to change their business models and lay off some employees. “Brick and mortar stores will increasingly become a place of experience, a showroom with various options for presenting goods, both physical and digital,” said Janáček. The customer will be able to choose more how to order, pay and also have the selected goods delivered.

Kotrbáček also expects changes in the field. Traders will have to reduce operating costs, they will also make more use of alternative energy sources. Those of them who are not prepared for difficult times will not be able to continue functioning. “On the other hand, there are plenty of traders who are well prepared and see in this situation the possibility of getting access to interesting opportunities in important locations that were not available to them before,” he added.

Brands on the Czech market this year

Some brands that came to the Czech market this year
– clothes: American Vintage, Balenciaga, Chanel, Jacadi Paris
– sports fashion and sports: iFlow, GymBeam Fitness Hub
– jewelry: Teilor
– elektronika: HP
– equipment and accessories for the home: Home&You, Materasso, Tefal

Some brands that left it
– Iceland, Nordsee (food)
– Hervis (sport)