Head of Retail Group on Challenging Year and Expectations for 2022
Rezo Magalashvili, Head of Retail Group Georgia, looks back on the year 2021 and discusses the company's plans for the following year.
2021 in review
We had two pandemic years. Compared to 2020, the improvement in 2021 was that the environment was more predictable.
In 2020, we were constantly operating against the background of surprises, new restrictions were imposed. This year it has become much more predictable, it has always been the same regulation.
In terms of revenue, 2021 is much better than 2020. In 2021, online projects also worked very well. We did not have any losses in terms of staff either.
With quite a few restrictions, we are running the company normally this year. The sales rate is almost close to the 2019 rate. Until September, the company's revenues were reduced by about 35% compared to the same period in 2019. However, since then Retail has revived quite a bit and almost equaled the 2019 figures.
It is identical in national currency, however, the dollar is about 13% behind the 2019 rate. Importers import products in dollars and euros. Therefore, to get the full picture we need to do an analysis in the currency as well. The dynamics are uniquely positive, this has allowed us to open new brand stores throughout the year, including the 3 kiko Milano brand. 2021 also gave us the opportunity to plan the introduction of new brands in 2022.
2021 was a difficult year, however, it strengthened us and we are meeting 2022 very firmly.
The main challenge
The main challenge was inflation. The amount of free disposable money has decreased in the population. The reason for this is that the prices of basic necessities have increased, therefore, there is less money left for clothes and entertainment. If this situation continues, it will bring negative consequences for the sector as well.
Expectations for 2022
We live in a very unpredictable environment. Consequently, it is difficult to talk about expectations. Inflation must stop, we will find ourselves in a very difficult situation in the conditions of double-digit inflation.
Given the epidemiological situation and the pace of immunization, we do not know in advance what limitations we will face.
Nevertheless, we still have plans - our head office is negotiating with up to 10 brands, of which we should expect 3 new brands in Georgia in 2022.
I will not specify how much investment will be made in opening new brands and new stores at this stage, however, opening 1 store, on average, costs from $ 200,000 to $ 3 million, depending on the brand and the space.
The company will focus on strengthening online platforms in 2022. As a result, next year the company will launch a web platform of 6-4 brands. Including "Mango", "Aldo" and so on.