Although the retail segment is among those affected the most by the coronavirus crisis, this does not show in the number of brands newly incoming to the Czech market. Whereas 24 new brands came to the country in 2019, according to a market survey by Cushman & Wakefield, in the crisis year 2020 there were 25. This year, the number of newcomer brands could be even higher–some brands postponed opening their shops to 2021 due to the corona crisis. The global coronavirus crisis has obviously hit the entire world, affecting the high street and major premium shopping centers the most. Still, Prague and the Czech Republic have always been and will remain the most important market for new brands coming to the region.
Jan Kotrbáček, Partner & Head of CEE Retail Agency team, Cushman & Wakefield, commented: “Prague, where most newly incoming brands are headed, has historically been a preferred tourist destination for a long time. So, we expect this major part of the local purchasing power to return once this is possible again. The customer potential is also strong among the local citizens: their purchasing power is growing and they tend to buy more expensive products. The Czech retail market is approaching maturity, which is why more than one half of the newly incoming brands are in the premium and luxury segments. In fact, the retailers note that even though Pařížská Street has lost customers from China and Russia, Czech customers make up for that in part, as they are more affluent than they used to be.”
Fashion and F&B rule
As has become a tradition, the most brands that came to the Czech Republic last year were in the fashion industry, which also saw the greatest changes in terms of arrivals and departures. Eight fashion retailers came to the country, plus two sports clothes retailers, three accessories brands and one premium shoe brand. Five new brands are from the food and beverage services, and the range of leisure concepts has grown with a family fun park from Russia opening the largest scheme of this type in a shopping center in the Czech Republic.
The most important newly incoming brands include GAP (USA), which opened several stores through its local partner in the Czech Republic towards the end of the year. In the F&B segment, the Grom craft ice cream concept as part of Unilever, is a major arrival with a newly opened shop in the upper part of Wenceslas Square. One noteworthy arrival in the specialized segments is a Cybex shop (in Široká Street connected to Pařížská in Prague), which has become the flagship store for Europe offering children’s goods and accessories. For luxury brands, Saint Laurent from Kering Group deserves a mention. The value segment, which is thriving during the crisis, has grown with the TEDi and Action brands.
The most frequent country of origin of the brands newly incoming to the Czech Republic was the USA (eight brands), followed by Italy (six brands). Czech brands expanded as well, primarily to Slovakia. Examples include the Jena Nábytek furniture retailer, Bonami home accessories brand and the Saunia leisure concept. Another Czech brand, Sportisimo, expanded into a shopping center in Sofia, Bulgaria.
14 brands exit the Czech market
The ratio of the main retail concepts where the newly coming brands were headed was balanced in the Czech Republic last year: 10 chose high streets in Prague’s center, 10 came to malls–mostly in Prague and one each in Brno, Hradec Králové and Kladno. Four out of the five remaining brands came to outlet stores and one went to a retail park.
Fourteen brands left the Czech market last year. Most of them were in the fashion segment, including clothes retailers Camaieu, Next and Promod and accessories brands such as Frey Wille and Tous; in addition, three café chains left the country, too. Kotrbáček said: “The number of brands that left the Czech market last year is not immediately connected with the corona crisis impact. The number is somewhat higher than usual, but in many cases, this is part of companies’ long-term strategy, or they are leaving markets that do not work for them.”
A record-breaking year 2021?
The complicated situation in 2020 changed and/or delayed certain brands’ plans for opening their shops in the Czech Republic. Many have rescheduled it for 2021. El Gaucho has publicly declared its plan to return to the Czech Republic this year; new arrivals will also include Primark in Wenceslas Square, a Cinemax multiplex cinema in Olomouc, and Chanel in Pařížská. Of course, the situation is uncertain and will depend on the future development of the coronavirus crisis and the related measures, which significantly affect the retail market and the physical opening of shops. If the developments are favorable, this year could be very important and in fact record-breaking in terms of new brand arrivals on the Czech market. Even though there are no plans for opening any top-class shopping centers, which the arrival of multiple newcomers to the market is usually connected with.
“It is true that the situation on the retail market complicates brands’ expansion plans. Some tend to wait while others are more careful in selecting the most suitable market and the best location. This makes them even more appreciative of the assistance from a reliable local partner possessing a good knowledge of the local market. In this respect, we have been recently approached by Primark, Cybex, Superland, Gap and Grom, whom we helped selecting the best locations for their first shop on the Czech market; in the past, such brands included many others such as Foot Locker, Hard Rock Café, Jimmy Choo, Claire’s, Sports Direct and Tiger,” says Kotrbáček in closing.