Fashion ranks among the least developed luxury sectors of Colombia’s luxury market, with very few international luxury brands being represented with mono-brand stores. The Colombian market is dominated by wholesale / multi-brand retail, the most important players being local companies Le Collezioni and Luxus.
Le Collezioni, the largest multi-brand retailer in Colombia has six locations in the capital city of Bogota, one location in the city of Medellin (the second largest city in Colombia) and a recently opened one in city of Barranquilla. The company also has plans to open a dedicated mens store in Barranquilla and a women’s speciality store in Bogota. Despite some very good locations, with enhanced visibility, most of the Le Collezioni stores display a tired look, resembling outlet stores rather than luxury stores selling new collections.
At Le Collezioni stores, merchandising and interior fittings fall short of a luxury concept, not to mention customer service, most sales assistants speaking no foreign languages besides Spanish and with a presence of a fast fashion store assistant. The large stickers carrying the logos of the brands in the windows of all Le Collezioni locations only add to the mass market feel.
From the mix of brands, the most prominently advertised are Prada, D&G, Salvatore Ferragamo and Just Cavalli. The men’s brand mix includes Ermenegildo Zegna, Kiton, Canali, Harmont Blane, Hackett and high end luxury shoemaker Church’s. While for some of the brands Le Collezioni stores definitely carries the latest collections, for others, they carry a mix of new and old collections (outlet, stocks), all priced as new collections.
Such practices are very detrimental to the local luxury market, many savvy consumers opting, instead, to shop abroad. The shortcomings of luxury fashion and accessories multi-brand retailing in Colombia have gradually contributed to consumers losing trust in the respective retailers and in the multi-brand concept in itself. Colombian consumers have even developed a phobia against the multi-brand concept, where they doubt not only the seasonality and price of the products but also the genuiness of the respective products. Most consumers are also disappointed with the limited stock, hardly finding their required size, especially in ready to wear.
Luxus is the second largest multi-brand operator, with three locations in Bogota, including one at the airport and three announced future locations in the cities of Medellin, Barranquilla and Cali. The Luxus stores are smaller than those of Le Collezioni, yet, their merchandising is of international standards, with a more discreet branding. The brand mix includes Loewe, Dolce Gabbana, Hugo Boss, Adolfo Dominguez, Marina Rinaldi, Adolfo Dominguez.
The fact that international luxury fashion brands have been unaware of the real potential of the Colombian luxury market is also evident in the fact that, for some brands, despite the fact they are represented with mono-brand, franchised stores, they are widely carried in multi-brand stores operated by competing retailers. Such examples are: Hugo Boss, Loewe, Adolfo Dominguez – all three being represented with mono-brand stores operated in franchising by one local retailer and sold in wholesale by competing retailers. This is why, Hugo Boss products can easily be found in at least 5 locations in Bogota, including the airport.
The international luxury brands which are represented with mono-brand stores are: Louis Vuitton, Loewe, Carolina Herrera, Paul & Shark, Max Mara, Versace Collection, Hugo Boss, Adolfo Dominguez, Ermenegildo Zegna,Pronovias. The only directly operated stores are Louis Vuitton and Ermenegildo Zegna. While Ermenegildo Zegna has the best representation among all international luxury brands in Colombia, with a beautiful store in a very good location, the Louis Vuitton store is probably the smallest I have ever seen internationally.
The fact that the concept of the Louis Vuitton store is so old, it almost made me think it could be a fake one. Fortunately, later, I learned that it was indeed a directly operated official Vuitton store, the brand motivating its current location saying they have been on the outlook for a new location for a while, however, a suitable one is yet to be identified. The Louis Vuitton store in Bogota is situated on the ground-floor of the Andino Mall with direct street access, is less than 100 sqm and carries only a limited selection of leathergoods.
As for future store openings, Emporio Armani mono-brand store is due to open by the end of this year. The Emporio Armani store will be operated in franchising by the local partner of Chilean based Home Center mass market furniture and interior decorations stores and will be located downtown, in the T Zone, in a newly constructed three floor building. Le Collezioni, which already operates the franchised store of Hugo Boss, announced plans to open a mono-brand store for Kiton, next year.
Accessories (shoes and bags), children wear, bridal and menswear present the highest opportunity for future growth in Colombia’s luxuy market, all these segments being under-represented and demand exceeding offering. As for consumer preferences, Italian brands notoriety exceeds that of US or French brands, colourful, modern and contemporary design being preferred over classic or understated luxury.
Following extensive research, CPP Luxury Industry Management Consultants Ltd estimates the current value of the luxury fashion sector in Colombia at USD 250 million, its potential being at least USD 400 million, including brands which are not yet present as well as shopping abroad. One of the challenges of the luxury fashion sector is the textile import licence which can be obtained through a very bureaucratic process after almost 2 months.
Watches represent the most developed sector in Colombia’s luxury market, with all major international luxury brands present, from Bvlgari (mono-brand boutique), Cartier (mono-brand – temporarily closed for renovation) and MontBlanc (5 mono-brand boutiques in Bogota) to Rolex, Patek Phillippe, Audemars Piguet, Omega, Hublot etc. The most important luxury watches retailer is local company Bauer with three boutiques in Bogota, which carries Rolex, Patek Phillippe, Audemars Piguet, Chopard andIWC.
There are also three nationwide watches and jewellery retail chains, with tens of locations. Sales of luxury Swiss watches have also been boosted recently by the trade agreement between Colombia and Switzerland, which stipulates a minimal important taxation of Swiss watches into Colombia. CPP Luxury Industry Management Consultants Ltd estimates the value of the Colombian luxury watches sector at USD 250 million, of which almost 30% is commanded by the black market, a number of individuals bringing watches from abroad (mainly US airports) and selling them directly to consumers, without providing an invoice.
CPP Luxury Industry Management Consultants Ltd expanded its reach onto Colombia early 2011, planning to elaboate and extensive luxury market report pn Colombia, with an in depth analysis of all luxury sectors and the consumer profile.
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