At the end of September on the main street of the capital opened a shop “VSI.Svoï” specializing in home goods and decor. On three floors of the store is a lot of Ukrainian brands of ceramics, textiles and furniture.
One of the tenants of the new store was the Ukrainian brand Drommel, producing furniture in a Scandinavian style. delo.ua spoke with the managing partner Drommel Dmitry Fedchenko about the causes of the brand in the store on Khreshchatyk, and the arrival in Ukraine of IKEA and the future plans of the company.
Photo: co-founders of the brand Dmitry Fedchenko (left) and Alexander Nightingale
CERTIFICATE OF DROMMEL: the Company was founded in 2014 in Kiev, Dmitry Fedchenko and Alexander Nightingale and specializiruetsya in the manufacture of furniture in a minimalist Scandinavian style. The staff includes about 30 people. Sale is carried out mainly through the online store, also have your show room in Obolon in Kyiv. The company is located in the Kiev region.
You become a tenant of the shop, VsI.Svoï. This is a great store on Khreshchatyk. Probably here and the rent is large. It is beneficial to you?
Yeah, it’s pretty high stakes. If you compare, for example, Ocean Plaza, which is now, as far as I know, has the largest rate among the shopping centers here are expensive. Profitable for us to be here from the point of view of what is in the center of Kiev, is a kind of advertisement for our brand. That is rather a marketing than sales.
Still, it will pay you or is it more likely for the image?
Yes, it is rather an image project. He’s not exactly a loss, but the focus, again, here is more on marketing.
And you can call the numbers how much the rental costs.I.Svoï?
We pay a percentage of sales. I’m not sure I can reveal these numbers.
But at least approximately?
Let’s just say, it’s about 20 to 40%, there are different rental rates.
What you have here will be presented? All products or only some? Staff will work with your company or local sellers?
It will work with local sellers, we have held presentation of our brand, trained them. Here will be presented all products only part. More assortment on our website and in the showroom.
Next year Ukraine officially comes to IKEA, they have previously announced plans to cooperate with the Ukrainian manufacturers of furniture. You negotiated? And if you don’t plan to cooperate, how do expect to compete?
We are going to be strong in areas where they are weak. For example, they can not fully cover the B2B segment. We have recently launched a new direction in business and Drommel select. We are planning to meet all individual needs of the client. This certainly won’t be from IKEA.
But the arrival of this retailer we are not afraid. I believe that it will eliminate the unstructured market of companies that have no plan, understanding how to move in the business.
READ ALSO: Top-Manager IKEA about how the company enters the Ukrainian market: what, where, when
And cooperate with IKEA is still planning?
I know that they have requests for production, but they are a little out of our sphere. As far as I know they have in Ukraine was more of a request to manufacturers of decor and sofas. We now go to the segment of sofas, we recently did a new line of sofas and beds. Previously we longer associate with tables, now we are expanding our range.
But categorically denying the plans for cooperation with them, I will not, anything can happen. Our facilities today allow you to produce something for them. We have already conducted negotiations on cooperation with JYSK (Danish retailer of furniture and home goods — ed.) but they have, of course, the quality is not up to our standard. We simply will not be able to produce so cheap. IKEA level of quality, of course, higher. So they can work together.
You my furniture now only sell in Ukraine or abroad too?
We sell in Ukraine and we had to sell abroad, but not many. We have set a goal to set all the process here. And then — Yes, we plan to expand outside of our country. Focus will be on the CIS countries and further into Asia (Kazakhstan and possibly Kyrgyzstan). In Europe we do not see yet, except Germany. This market is interesting, it’s a bottomless market. I studied the report of IKEA, so this one country accounts for 15% of all sales of the retailer in Europe.
And look to foreign markets? Go to the exhibition or already have concrete plans? And how are you going to go? Through partners?
Every year we visit all the best specialized exhibitions. How to get out — not yet known. We see the way out through partners-retailers, your own shop do not plan to open. But it is more long-term plans, say, within the next two years. Now intend to concentrate on development in our country, we are here to grow.
If we take the whole furniture business in Ukraine — what’s his problem? There are issues that must be addressed by the state?
The biggest challenge for the furniture business in Ukraine is that our consumer is not willing to pay money for services that he provides along with the furniture.
That is, the low purchasing power?
Not quite. Most people want at the same time and individually, and cheaper. But it does not happen.
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