The future commercial center Cocor Luxury Store in Bucharest has recently launched its own rating system of brands and their distributors. The rating system is, in fact, an open bid that takes into account how much the stores are willing to pay for the rent, the novelty factor on the Romanian market and the brands presence on the rating lists of the Luxury Institute, instyle.com or shopping.yahoo.com. Unfortunately, though, far from the meanings of ‘the luxury civilization’, the “rent” counts as much as all the other three criteria put together.
For any common sense consumer or for whomever knows how this market works, it is obvious that the bidding system does not find its place among the fundamentals of luxury, a space where exclusivity and heritage are the most appreciated attribute of all major brands. Not the willingness to pay, at a first call, a 50% + rent, compared to the reference rent level demanded by Cocor SA. We wouldn’t have insisted on this aspect, weren’t it for the information listed on cocorluxury.ro, where the emphasis falls, from the very beginning, on the fact that prices called by brands are the main criteria, in case two brands would receive equal ratings.
Moreover, the system promises that “top-brands retailers that are not currently present on the Romanian market will be automatically qualified for locations in the Cocor Luxury Store if they offer at least the reference rent proposed by the owner”. This way of approaching a still immature market brings a lot of prejudice to the already existing brands and retailers. Those who assumed the role of developing a luxury market, despite the lack of infrastructure and regardless the fact that a category of consumers was not yet formed, are now in position to bit against each other, for rent levels above those of newcomers.
The fact that the existing brands already have a significant group of loyal customers would be nothing but an advantage for the Cocor Luxury Store, in fact getting them to open a second store in Bucharest should be enough of a reason to make the Cocor officials suggest better rent conditions or other incentives. Or, at least, suggest a rent level well below the luxury “high street” locations hosting them. Instead, the bidding system may push the rent to a similar rent level, discouraging any development.
Unfortunately, there already are signs the ‘bidding’ system for locations is not well seen by some of the top brands, initially advertised as ‘the certain’ future tenants of the Cocor Luxury Store. The argument is that the brands’ history and heritage, as well as the international recognition turn futile the implementing of a new brand measuring system of the companies’ performance.
The original ‘brands evaluation’ system comes as a peak after an infinite line of issues making the Cocor project development less and less plausible. One should not forget that the geographical location near the ‘0 kilometer’ landmark in Bucharest will bring along a series of obvious problems. The first would be the hellish traffic, throughout the day. Even if the parking problem would be solved, (some parking wing was supposed to be built behind the store), it will not make things better regarding the access and leaving possibilities – narrow streets and historical monuments.
Far more, 50 meters North it’s the national headquarters of the pirate CD smugglers and counterfeit perfumes. 50 meters South, illegal gambling is still on, in broad daylight. Illegal currency exchangers, always ready to start a fight, and their forever present sidekicks, the pickpockets, are packed nearby the Cocor entrance. On the streets behind the store, prostitution and drug dealing and abuse are far from being discreet. At least two decades from now, the entire area will be the subject of endless and disturbing renovation and rehabilitation.
Another huge issue: the average pedestrian on the store’s sidewalk to do with the luxury consumer. Historically speaking, the Lipscani-Unirea area is under the reign of mass-market products. Those who stroll the streets may as well admire the multi-media façade of the Cocor Luxury Store, but with a similar air as watching the ‘Sex and the City’ TV series – messenger of a far-away world, of a weird and obscure segment of society.
On the other hand, the constant flow of low income consumers will make the façade advertising more attractive for ‘low-end’ producers, and their offer even harder to refuse (especially since the price is the most important selection criteria, as the brand evaluation system indicates). Therefore the Romanian Time-Square may very well mean to admire a La Perla top-model and a Prada hand-bag (may there be such stores within the Cocor Luxury Store!) along an advertising of a ‘Dairy Godfather’ spreading slaps and cheese sandwiches for the children, or fitness-unaware housewives recommending cheap detergents and flavor enhancers for home made foods.
While the rent level is constantly dropping in the Capital’s richest areas, such as the Magheru Blvd, Calea Victoriei and Dorobanti, a common sense question arises: why would a top brand invest in Cocor Luxury Store? And, taking into consideration the 5,000 square meters space, the solution arises from within: the space that will not be rented by ‘top-brands’, subject of coveted glossy analysis and renowned websites, will be taken over by multi-brand stores (rumor says there are quite a few already setting in)… And this obviously means that, as in any other multi-brand store, higher prices then in all Western markets, non-exclusive distribution, unhealthy competition, a limited amount of lines, mixed quality and price segments, poor brand value communication and lower standards of service.
In such terms, the space bidding system is nothing but a “fool’s gold”. The aim should be to attract all the top names on the market, imposing a higher representation standard, intensive communication following the “culture” and “civilization” of the luxury environment, some ‘social corporate responsibility’ investments for sanitation of the area and many more of the kind. Or, at least, some honest prices being demanded for space allocation, considering accessibility, visibility and other similar, natural attributes, instead of an original, but unworthy bidding system.
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