Rinascente department store chain busy with major renovations in Italy
The retail crisis doesn’t seem to be affecting Italian department store chain Rinascente, which continues to invest heavily in its stores. After inaugurating a new flagship branch in the heart of Rome at the end of 2017, featuring a 14,000-square-metre retail area on the uber-central via del Tritone, the Italian retail chain owned by Thai company Central Group is once again busy with major renovation work, chiefly in Turin and Florence, while it is also seeking premises in Naples.
Rinascente's strategy is to target highly prestigious locations, going unambiguously upmarket in order to create a series of genuine accessible-luxury hubs, while also watching out for the more directional labels, capable of appealing to a young, cosmopolitan clientèle. At the same time, the group is streamlining its store network, suppressing the less profitable branches, those which have not been able to rejuvenate their customer base and are affected by the adverse economic situation in Italy. Last February, Rinascente closed down its Padua branch after doing the same in Genoa a few months earlier, at the end of October 2018.
In parallel, the department store chain started extensive renovation work three years ago in Turin, where it operated since 1973 a 3,500-square-metre store in the via Lagrange pedestrian area, not far from the city's renowned Egyptian Museum. “We invested €33 million to buy the building and double the branch's retail area from 3,500 to 7,500 square metres and from three to six levels, plus an extra €20 million to renovate it entirely,” Rinascente general manager Pierluigi Cocchini told FashionNetwork.com.
As with the other renovations under way, Rinascente called on several renowned interior designers and architects, each taking care of a section on one or more floors: Gianmatteo Romegialli, who is also overseeing the façade, Paolo Lucchetta, Fabio Fantolino, David Lopez and Fanny Bauer Grung. After inaugurating the two floors dedicated to menswear in February, only one floor still needs to be revamped, its opening scheduled for October 2019. In the newly renovated areas, sales rose by 70% according to Cocchini.
Building a roof terrace in Florence
Another major upgrade is under way in Florence, where work began last autumn and is scheduled for completion at the end of 2020. The store, located very centrally in piazza della Repubblica, extends over 3,500 m2 on seven levels, and will be entirely made over, notably with the addition of a large roof terrace housing a restaurant. The investment is €13 million.
“It won’t be a traditional branch, but a new kind of Italian-style multibrand store, strongly anchored in Florence's mainstays, like cuisine, leather goods, accessories and footwear, as well as menswear. The product range will change completely, with more local labels alongside luxury and experimental ones,” said Cocchini.
The ground floor will be entirely dedicated to leather goods, while perfumes, usually showcased on that floor, will be displayed on floor -1. Two very extensive sections will be focused on men's and women's shoes.
The last major upgrade project currently under way for Rinascente is the €30 million renovation of its second Rome branch, in piazza Fiume, the group's third-ranked store in terms of revenue. The branch attracts more of a local clientèle, and has been based since 1961 in a modern building designed by Franco Albini and Franca Helg.
“Our strategy is to constantly reinvent ourselves, while making each of our stores unique, and intimately connected with the city where it is located. Rinascente is like a collection of different stores, all with the same DNA, but each fitting snugly within its local environment,” said Cocchini.
“We are also working hard on repositioning the product range, following the most directional labels closely, capturing trends and becoming more proactive in making rapid changes. We lately focused on labels like Balenciaga, Off-White and Thom Browne,” added Cocchini. In fact, Thom Browne recently opened its first concession in an Italian department store, at Rinascente in Milan of course.
Comp sales up nearly 9% since the start of the year
Rinascente operates nine branches in Italy, and in 2018 it generated a revenue of €700 million, up 21% compared to 2017, while comp sales grew 7%. “For 2019, we have the wind in our sails, with comparable sales growing between 8 and 9%, while our Rome flagship store in via del Tritone is recording, in its second year of trading, a 20% rise in sales,” enthused Cocchini.
Central Group generates a revenue of €1.6 billion in Europe, with a total retail area of nearly 100,000 square metres. Three years ago, the Thai group began an extensive renovation programme, upgrading three KaDeWe stores (in Berlin, Alsterhaus in Hamburg and Oberpollinger in Munich) for a total investment of €250 million, and also renovating Copenhagen department store Illum, for another €80 million, the two other department store chains Central Group owns besides Rinascente.
“It’s a very sizeable investment. But when we offer innovation, customers respond. Changing and evolving constantly is of paramount importance,” said Vittorio Radice, vice-president of Rinascente group.
Among the initiatives tested by the group, there is the ADVM (Aux Villes Du Monde) app: a sort of virtual club offering a personalised concierge service to the customers of Rinascente’s nine branches, providing information on events and the right destinations for the city in question. The app was launched in 2017 but it hasn’t yielded the results expected, and should be terminated in due course. Instead, Rinascente’s on-demand personalised shopping service via WhatsApp, offering a direct contact between customers and the store’s personal shoppers, is a huge success, with nearly €3 million worth of transactions carried out using this system.
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