CRC making a splash in the heart of Europe

IS ONLINE SHOPPING KILLING RETAIL STORES?
Many department stores worldwide have narrowed their ambitions over recent years, either shuttering stores or suspending their expansion plans, generating upheaval in the bricks-and-mortar landscape.
However, Central Retail Corporation (CRC), Thailand’s biggest retailer, is taking the opposite tack.
CRC, a subsidiary of Central Group, says it will continue to look to expand its footprint in Europe after completing its purchase of upscale British chain Selfridges Group, its latest acquisition in the region.
Although European markets are maturing, the Thai conglomerate sees high-end flagship stores as essential landmarks in big cities, according to Central Retail Corporation chief executive Yol Phokasub.
WHEN OPPORTUNITY KNOCKS
According to Mr Yol, the door to international expansion is now open.
“We are tracking lucrative potential locations to further expand business internationally,” said Mr Yol, adding that the company is currently focusing on Vietnam and Italy. Longer term, Malaysia and Singapore will be the group’s next step in terms of international expansion.
“The department store isn’t dead, it’s evolving. And there’s still plenty of room for optimism for the traditional model,” said Mr Yol.
Selfridges Group in the UK is a standout example, which continues to innovate and introduce new concepts and ranges to attract customers.
In Italy, CRC will continue to transform Rinascente Mall into becoming a fully fledged luxury department store chain. The company has carried out continuous expansion, made improvements and developments, including revamping the layout of the department stores, adding new luxury brands and enhancing the level of service via online channels.
The Rinascente On Demand channel provides a live chat service through which consumers can order products directly via members of Rinascente’s staff in Italy, who are set up to deliver exclusive products and services to customers across the globe.
CULTURAL HUB
In Milan, Rinascente is spending over €40 million (1,453,857,712 baht) to create Rinascente Odeon Beauty Hall, a hub covering over 3,000 square metres dedicated to more than 300 leading brands of make-up and cosmetics, skincare products, fragrances as well as a beauty bar.
Rinascente has signed a long-term rental agreement for a landmark location adjacent to Duomo Di Milano — the church cathedral of Milan — providing a convenient new beauty destination for locals and tourists alike. Known among locals as Odeon, the venue operated for almost 100 years as a cinema, providing the city’s residents with an important cultural hub and meeting point before eventually closing its doors last year.
The Rinascente Odeon Beauty Hall will include a grand floor area totally dedicated to jewellery, luxury watches and accessories. Another area of around 700 sq m will be dedicated to the provision of food and beverages.
“The expansion and renovation is scheduled to be completed so that it can open in May 2027 to generate increasing sales volume for beauty products among both locals and tourists,” said Rinascente chief executive Pierluigi Cocchini.
“Rinascente is not simply a department store, but a place where people can find entertainment, design, history, and fashion. We are thrilled to provide Milan’s residents and visitors with a new destination for shopping and especially for entertainment,” he said.
“We expect to attract over 3 million visitors, with a turnover of around €80 million, starting from year one,” Mr Cocchini said, adding that the current turnover of €200 million from the accessories area is projected to reach €370 million in the first 12 months.
STORES STILL REIGN SUPREME
When it comes to the actual purchase of goods, online sales still only account for a fraction of overall sales. About 10% of sales in Thailand, Vietnam and Italy are made online, so physical stores remain an essential part of the retail landscape, Mr Yol said.
But omni-channel, or transacting across multiple channels, which may include marketplaces, social channels, physical stores and other sales outlets, is growing at a significant speed.
“Our omni-channel sales will contribute 20% to the group’s total sales this year, and this is expected to reach up to 30% over the next few years,” he said.
In reality, although online shopping is growing, it still has a long way to go.
The most optimistic estimates suggest it will be five years or more before online and retail shopping are equally balanced when it comes to consumer spending, Mr Yol said.
As traditional retailers face online competition head on, Mr Yol said CRC has increased its investment in online channels and has modified its in-store experience.
There’s no denying the fact that the internet is a vital ingredient in business today and e-commerce firms have increasingly been stealing market share from traditional retailers.
However, Mr Yol said this hasn’t put a dent in the importance of physical storefronts as stores offer greater personalisation in terms of the customer experience through the provision of a greater assortment of products.
“Most Central Department Stores are still too crowded. We have been embarking on hybrid ventures in an effort to attract cross-sections of the consumer population,” he said.
SMASHING ALL RECORDS
CRC posted record-breaking sales of more than €1 billion in 2023 for its luxury Rinascente department stores in Italy, which is higher than the pre-pandemic average.
Rinascente Italy posted a 17% increase in sales last year, attracting 20 million visitors to its stores. Earnings before interest, taxes, depreciation and amortisation surged by 70% year-on-year, based on undisclosed official figures.
Rome Via del Tritone posted a 17% surge in sales, with Milan recording a 19% jump, and Rome Piazza Fiume recording 35% growth following its renovation.
CRC bought the 158-year-old department store chain in 2011 for €205 million, with the goal of taking the brand global within five years.
Rinascente is the only European luxury department store under CRC, operating nine branches in Italy, namely Milan, Rome Via del Tritone and Rome Piazza Fiume, Turin, Florence, Cagliari, Palermo, Catania and Monza.
Thai shoppers who are The 1 members can receive discounts and collect The 1 points at Rinascente department stores throughout Italy.
Central Group has expanded its retail empire across several major cities in Europe, including Selfridges in the UK, Rinascente in Italy, KaDeWe in Germany, Illum in Denmark and Globus in Switzerland.