According to the figures registered at the Hungarian fiscal authorities, Louis Vuitton is the best selling luxury brand in Hungary, with only one store in the capital city of Budapest. Vuitton’s yearly turnover exceeded by 30% figures registered by Gucci. Vuitton opened 2 years ago a directly operated store on Budapest’s leading highstreet Andrassy Ut. We would not disclose exact figures due to confidentiality.
Due to the current crisis, the Hungarian economy has been one of the most affected in the entire Central and Eastern European region. The local luxury market has been particularly affected considering over 70% of sales rely on foreign travellers, both business and leisure the number of which has diminished dramatically in 2009.
Other brands which are operating with mono brand stores in Budapest are D&G (franchised), BURBERRY (franchised), GUCCI (directly operated store), ERMENEGILDO ZEGNA (franchised), ESCADA (franchised), ZILLI (franchised), FURLA (franchised), EMPORIO ARMANI (franchised).
CPP has indicated as early as 2007 that some top international luxury brands have rushed to open on the Hungarian market, without being aware of the dependency of sales on foreigners and ignoring regional markets with a much higher potential such as Serbia and Romania. Faced by the financial crisis, many of these brands have no other choice but to enter such countries by franchising.
Although most of the existing luxury brands have chosen Andrassy Ut Street for their flagship location in Budapest, the highstreet is far from a luxury look and environment, many buildings have been left unrenovated and many mass market small shops are still mixed with premium/luxury shops.
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