The FINANCIAL — With investments of 2 million USD, Gagik Baghramyan, Executive Director of Next clothing store in Armenia, has brought the UK brand to Georgia. In 2009 the annual turnover of the Armenian branch of Next reached 3 million USD. In Georgia Baghramyan expects to get a larger volume of benefit, stipulated by the huge opportunities of the Georgian market.
In an exclusive interview with The FINANCIAL Baghramyan underlines the common interests of Armenia and Georgia. He says his country is much dependent on Georgia; that developments in Tbilisi are immediately affecting Armenia.
“The Russo-Georgian war affected the Armenian economy very much. Citizens of Armenia were unable to receive certain products as a result of the conflict. The railway was blocked and transit movement in Georgia was restricted. The Armenian banking sector also temporarily stopped giving out loans. In late 2009 they restored the crediting process and decreased interest rates,” Baghramyan says.
The Armenian businessman says that Georgia is a country of bigger opportunities than Armenia.
“Georgia continues to improve its image as a tourist destination and this correspondingly enhances the opportunities of businesses, especially the service sector. Whereas in Armenia an entrepreneur will manage to see benefit in a year and a half, in Georgia he will manage to see it in 7 months,” Baghramyan told The FINANCIAL.
“Next is offering stylish, good quality products in clothing, footwear, accessories and home products. It gained huge popularity among Armenian customers after its initial opening in the country. The main factor that helped the popularity of Next in Armenia is the beautifully designed two-storey shop, which is the largest in Armenia and a synthesis of quality and cost.”
“At very accessible prices Next offers various kinds of products to every person, regardless of gender, age and social class. These factors were determiners for finding the key to our customer’s hearts. Next is one of the most popular stores in Yerevan. On my way to work I frequently see people dressed in Next clothing. We are doing our best in order to gain the same popularity amongst Georgian customers. We should prove that we deserve our customers’ loyalty. We will work hard in order to provide maximum satisfaction for Georgian shoppers.”
NEXT Success in Armenia, NEXT Georgia
In 2009 the total turnover of Next in Yerevan was 3 million USD. This is not a paltry sum and reaching such results with just one store was only possible because of the large popularity of the shop. The Armenian branch of Next was opened in November 2008. Our decision to increase our shares in Georgia means that Next has proven to be a profitable brand.
Q. What were the main factors that encouraged you to enter the Georgian market?
A. The successful results on the Yerevan market persuaded us to increase our shares on the Georgian market. We observed and researched the Georgian market for a long time. Investing in a foreign market asks for more caution, more detailed analyses and study of every detail.
During recent years Georgia has shown good results in almost every field that is important for entrepreneurs. The rules on custom houses and transparency of tax payment were a hugely positive step from Georgian officials. At present any person, 24 hours daily can fill in a declaration, check an account and so on. All these factors are very attractive for foreign investors. We have serious plans for the Georgian market and are not planning to remain satisfied with the results that we have already reached.
Competition and NEXT’s advantages
Q. The Georgian market has already been entered by different international clothing brands. What is the advantage of Next compared with its competitors?
A. The main advantage of Next compared with its competitors is that the Next store offers products for the whole family. The main goal of Next is to satisfy a diversified segment. While most of the shops offer products for concrete sex, age or taste, Next combines all these under one store. We do not have any price frames. We will work on the lower margins in order to have a large number of customers. The main concept of Next is the satisfaction of its customers.
I respect all the entrepreneurs that are running business in Georgia. As for our competitors, all those people who are hard workers we consider our rivals. People who like their work and are doing their maximum are our competitors. We are ready to compete with all the innovations that will be offered by our rivals. Actually, competition helps company development on a number of levels and makes companies think about further development. The absence of competition results in unimproved service, so we are ready to compete and continue working on further development of the company.
Q. Which segment’s customers does Next target? Please name some famous Armenians who shop at your brand.
A. The Next brand is divided in three parts: Next essentials, Next regular and Next signature. Next essential is cheaper priced. For 76 GEL a customer can buy a 2 shirt and a tie. It is the best solution for employees of middle incomes. Next signature is more expensive, as the textiles are exclusively from France and Italy. Kid’s clothes are also diversified from all three lines: essential, regular and signature.
Another line of Next is Next home. We would like to increase our direction and also add Next home in our stores in Armenia and Georgia. If you switch to any Armenian TV channel you will find a person dressed in the clothes of Next. Most of the representatives of Armenian show-biz are our loyal customers, also politicians and managers. Next serves not only Armenians but also foreigners living in our country. For example the CEO of mobile company Beeline and his family are frequent guests of our shop.
Next is known for its diversification of style. Dressing only in Next clothes a person can go anywhere. One can dress up and go play sport, visit a club or party, have a B2B meeting, go to the theatre etc. What’s more, Next offers various lines of clothes, shoes, clothes, lingerie, bags and so on.
Q. Which fashion line does Next follow? Which fashion trends will be offered by Next in 2010?
A. The fashion trends of Next for 2010 offer clothes for a light lifestyle. It mostly includes casual clothes. Of course classic clothes will be trendy too. Lots of colours will be available in the trendy clothes of Next this year. 2010 is a year of worldwide performances, like the Olympic championship, world championship in football and the horoscope sign of this year – a tiger – which is a bright animal and accordingly dictates bright colours. The logo of Next is black and white and that means that these two classic colours will also always be trendy in our collections. Next renews its collections weekly. In our store customers can buy clothes that are currently on offer in the UK.
Q. How simple it was starting business in Georgia? Underline some differences/similarities of Armenian and Georgian markets?
A. The main difference between Georgia and Armenia is that the boarders of Georgia are more open than Armenia’s. As Armenia is bordered mostly by Georgia it is much influenced by the processes and business climate within the country. You can succeed in Armenia without any interference, but still the diapason of responsibilities is larger in Georgia. Georgia continues to improve its image as a tourist destination and in this case accordingly enhances the responsibilities of businesses, especially businesses that offer services. Whereas in Armenia an entrepreneur would see benefits in a year and a half’s time, in Georgia he would manage that in a much shorter time.
Q. What is the volume of sales that you plan to reach in Georgia in 2010?
A. Actually we are presently competing with our Armenian branch. Our goal is to get larger profit in Tbilisi than we saw in Yerevan. We only just opened our store in Tbilisi in March but we still think that the volume of sales will be larger at the end of this year in Tbilisi, compared with Armenia. For the end of 2010 we expect to have turnover of 5% more than was in Yerevan in 2009.
Q. During recent years there has been a boom in development of the construction business and banking sector. What is the situation of economical development in Armenia and how has the global recession affected the Armenian economy?
A. Armenia has not totally emerged from the global recession but we are seeing positive signs already. The banking sector in Armenia has restored its previous working process. Even real estate is a prospective field for making investments in but in the long term.
Q. Please name some of the creative business ideas in Armenia that are not developed in Georgia.
A. Programming is currently booming in Armenia. You can find lots of large scale companies that are focused on programming, preparing micro chips, and are cooperating with Microsoft and Intel. As I know Georgia has not reached similar scales of development in this field yet.
In Armenia infrastructure is very developed. It sounds implausible that infrastructure in Armenia is more developed than in Georgia. As considering the popularity and development of the tourism sector in Georgia this aspect should be at a higher level. Service quality needs improvement too. You can enter some shops and find the personnel just drinking coffee. It is not yet a fundamentally implemented rule in the services sector Georgia that the “customer is always right”.
BIO
Q. Please tell us about yourself. What is your education and work experience?
A. I am a graduator of the polytechnic institute of Yerevan and also the state economical institute, the faculty of finance and credits. I am single. Perhaps because of my priorities to be job oriented. I have been working from when I was 16, in various fields. All my friends call me a workaholic, but I do not think so. I just like running a business which I can love and faithfully devote myself to.
Q. Which clothes do you prefer and which stores or boutiques do you shop in except for Next?
A. My work position obligates me to follow a dress code. I am mostly dressed up in classic clothes. Usually I prefer a free style and mostly wear casual clothes, jeans and t-shirts. Since my cooperation with Next all my clothes are from this brand, except for watches. As Next gives me the possibility to buy everything I need from it, I do not visit other shops. I just make order some shoes from our Armenian cobblers. I only visit other shops for research purposes.
Q. What does Wealth mean to you?
A. Wealth is important, but for me it is mostly the ability of realization and reaching happiness of one’s soul. Wealth is a material ability of fulfilling plans. For me serving people, satisfying them and making them happy is the main goal. I use my wealth to please others and that makes me happy.
Q. Are you a frequent user of social networks?
A. I was registered on one social network but to tell the truth the last time I visited it was a year ago. I keep up contact with my friends with the help of email.
Q. Do you have a special recipe for becoming successful?
A. My special recipe for becoming successful includes constantly working on improving the abilities of myself. Being hardworking is a key factor for reaching success.
Q. Describe your day, at what time does it starts and what does it include?
A. I cannot remember when I last had a vacation. My daily timetable means waking up at 7 am. We open our store at 11 o’clock, but still I come to work at 9 am. Because of the difference in time I continue staying at work sometimes for the whole night in order to cooperate with our UK partners. Sometimes I try to switch off from work and make my brain rest. For that purpose I go to the theatre or find some comfortable place to relax and talk with friends.
Discussion about this post