ICSC event cautions brands not to overlook Baltics

Why should clothing brands expand into The Baltic States, where the population is less than 7 million? Because Baltic women make great brand ambassadors, according to Barbara Somogyiova, International Expansion Director at Italian clothing retailer List Fashion, speaking at this year’s ICSC Baltic States Retail Real Estate Conference.

However, there are economic reasons why brands are missing out if they do not look closely at this region of Europe, including three countries with the highest GDP figures in Europe.

For years, property professionals across Latvia, Lithuania and Estonia have been frustrated that big international retailers have refused to look their way. But with recession sweeping across the rest of Europe, expansion into Northern Europe suddenly seems a more attractive prospect to retailers hungry for growth.

And if the Baltic States join forces with near neighbours Sweden, Finland and Norway (Tallinn and Helsinki are less than two hours apart by boat across the Baltic Sea), the region would have a combined population of over 26 million, a much more serious proposition delivering economies of scale for retailers, say the region’s property professionals.

Marcis Budlevskis, Business Development Director at Linstow Centre Management, based in Riga, added: 'Northern Europe isn’t just a cluster of flags on a world map, it is an opportunity for good business expansion.'

List Fashion agrees. According to Somogyiova, 'We entered on that basis. Tourism is also growing, and many tourists have above-average incomes. The quality of real estate is good, footfall and rents remain reasonable and the markets of Finland and Sweden are similar to that of The Baltic States so once we were established, it’s much easier to expand across the region.'

For Pablo Rivera, head of International Expansion at New Look, also speaking at the conference in Tallinn, expansion is natural. 'If you want to succeed you grow. We have 40 stores in Saudi Arabia, We opened in Libya this summer and are selling double the densities we are selling in [our home market of] the UK.'