Baltika Group 2017
Baltika is growing from a vertical retail business into an international brand house that is aimed at ensuring a high-quality customer experience through all its different sales channels. Baltika’s largest business segment by sales volumes, profit and integral customer experience management is its retail business in the Baltic countries where competition has tightened considerably in recent years. The majority of strong European clothes brands have entered the market, which has created a situation where the customers’ expectations for the originality of products and the price and quality ratio have sharply increased.
One of the essential objectives in 2017 is still to maintain and increase sales volumes and profitability in the Baltic retail market through offering customers a better shopping experience. For that purpose, certain product development and retail business operation principles have been changed. More attention is paid to the original design signature and a larger proportion of high-quality products made in the factories of Estonia or nearby Lithuania. Active and well-targeted communication with loyal customers via the AndMore customer programme, as well as the development of Andmorefashion.com e-shop possibilities for improving the dissemination of information to customers (preliminary product selection), well-planned and managed outsourcing – which allows the brand to work with a smaller permanent stock and lower discounts – and the further development of the concept of multi-brand stores under the AndMore branding (Monton AndMore, etc.).
Besides the profitable Baltic segment, Baltika places great importance on developing and increasing sales in the wholesale, franchise and e-commerce area, which has strong sales potential. The branded and domestically profitable retail concepts have given Baltika the chance to develop a new sales direction for new markets – franchise. The first franchise agreements with foreign partners were concluded in 2013 in Belarus, followed by agreements in Tenerife, Spain, in 2014-2015, and the first Monton AndMore store was opened in March 2017 in Novi Sadi, Serbia. Together with the changes in the Ukrainian and Russian operating model, i.e. the exit from the retail market and transfer to the franchise model, Baltika had 33 franchise shops as at the end of the year. Baltika aims to improve and develop the franchise model further and actively seek new partners in new markets.
Also in wholesale the objective is to increase sales to existing partners and find new partners and markets. E-store constant development continues as well.
The Management board has divided the objectives into three groups:
- Successful company: increase profitability and improving gross profit and operating expense ratio;
- Content customer: increase in all sales channels through offering better customer experience;
- Motivated employee: to increase profitability it is important to maintain employees’ motivation and dedication.
No major investments are planned for 2017, regular amounts will be invested into own retail network.