Deep and Hot for foreign markets

Poznań-based clothes brands owner Semax plans to invest zł.2 million in launching new stores outside Poland. The company has already opened two outlets of 100 sqm and 200 sqm on Riazanski Prospekt in Moscow selling its two brands - Deep and Hot Oil. The latter is the first Hot Oil outlet to operate abroad under the franchise system.

According to the sales and marketing director of Semax, Jacek Czarnowski, the Moscow market has bags of potential: "There are numerous rich people here. The middle class is rapidly forming." A recent survey by Cushman & Wakefield agrees; in the near future, it says, Moscow will record the fastest increase in retail area in Europe.

Semax also plans to open further outlets of its brands abroad. In August the Deep brand will be launched in Almaty in Kazakhstan and in September in Prague.

In future Semax wants to expand its brands abroad on the basis of the franchise system (especially in EU countries) rather than opening its own shops. "Franchise allows the fast development of a sales network at a low cost. In our eastern neighbors, however, we will apply various mutations of partnership. It will not be a classic franchise, but a concept very close to it," Czarnowski explains, adding that the franchise system is not as popular in Russia as in the EU. According to Czarnowski, the costs of opening a store in Russia are about 50 percent higher than in Poland and vary, depending on the location, from $100,000 to $200,000 (zł.308-616,000).

Semax was founded 17 years ago, when it started as a clothing wholesaler. Today it employs 150 people.