The FINANCIAL -- Paata Gigauri, one of the founders of Ici-Paris, speaks about the company’s situation during the crisis period. In his interview with The FINANCIAL Gigauri reveals the company’s plans to bring new famous brands to its chain in 2009.
Perfume Company Ici-Paris which has just been named a winner of the Golden Brand awards for the 4th time, spent GEL 826,000 on its advertising campaign in 2008. One of the first local perfume companies in Georgia, Ici Paris plans to remain stable and target more careful politics in the company.
Paata Gigauri, one of the founders of Ici-Paris, speaks about the company’s situation during the crisis period. In his interview with The FINANCIAL Gigauri reveals the company’s plans to bring new famous brands to its chain in 2009.
Q. Ici Paris has once again become a winner of the Golden Brand awards. Would you say that the event contributes to the company’s image promotion especially in terms of the economical downturn?
A. The Golden Brand awarding ceremony is definitely a very serious and well known nomination in Georgia. As a result of its means and fame, it’s easy to say that for our company, this nomination has always been very important. So the answer to this question is definitely yes. We are sure that being named winner of Golden Brand reflects positively on the company’s image and promotion.
Q. How important is advertising for your company and what was the year’s budget for your advertising campaign in 2008?
A. Marketing is very important for our company. We pay much attention to advertising our company and we are doing our best to improve our marketing activities even in the midst of the economical downturn. In 2008 our company’s annual budget on its advertising campaign was GEL 826,000.
Q. Please name the major success stories of Ici-Paris that ultimately contributed to making the company a winner of the Golden Brand awards?
A. The success of the company is due to the productivity of long term activities, in particular a concrete business plan which was formulated about 15 years ago. This plan has been getting implemented for the past several years and today we can see its positive results.
We have managed to create a civilized partnership market with our different allies and today the Ici-Paris network unite 19 retail trade objects and 2 beauty centres. We have also opened an Ici-Paris beauty academy, which aims to train make-up specialists, stylists, pedicurists and so on. We hope that the beauty academy centre will become successful and that many people will therefore have the ability to be trained as professionals.
Q. What was your company’s story of 2008 during the financial crisis?
A. Despite the economical crisis, we regard our financial stability our company’s success. We think that we successfully ended the year 2008, taking in to account the very tough economical situation. We did face some serious global financial problems, to which Georgia’s August events were added, but the company is proud to have been resistant in such hard times.
The company’s annual turnover in 2008 was more than its turnover in 2007. We may include in our company’s success of the year those projects which were successfully presented at the beginning of the year 2009. Among those projects was the opening of a branch in Tbilisi on Leselidze Ave. In my view, our company’s main success was that we were strong enough to survive the hard situation when it was most needed, more so during a period of global recession.
Q. Your company estimated 38% growth in terms of income in 2007. How has the recession affected the company’s income?
A. Trying to prove that economical problems haven’t affected our company wouldn’t be right. Of course the financial downturn has negatively affected our company, the same as it has affected other, but at least not to a very high degree. The fact that our products are very demanded among customers even during the financial crisis helps our company retain stability.
It’s called the Lipstick Effect, when due to a crisis people aren’t able to buy very expensive and valuable things, like for example cars and houses, but they do buy cheaper products in order to satisfy their shopping urges. Our customers in such times are mostly women who are buying cosmetics in order to look good and feel reassured. Shopping is the best therapy for stress and this is quite helpful for the perfume business.
Q. How did the crisis affect the development of the perfume business in 2008 in Georgia?
A. In general I would say that expensive product realization has reduced during the financial downturn. People are avoiding buying very expensive products thereby reducing their outgoing expenses. Customers prefer to save their money and so cheaper products become more demanded. People also start to think about their supply line and become more careful in using their supplies in order not to have to pay additional expenses. So the situation on the perfume market in general has also been affected by the crisis.
Q. In 2007, in terms of marketing activities, the company launched youth discount cards, are you still instigating such activities in your company and how profitable are they in terms of the recession?
A. They are the right thing to do without a doubt. We should be always loyal to our clients and think about encouraging them in different ways. You shouldn’t only think about profits, but also about encouraging your clients sometimes. If a customer is a loyal client you should always think about stimulating their interests.
This year we plan to add a new French brand to our youth package. The Barbara Gold brand is made for skin care so women will be able to look after their skin while smelling of a pleasing fragrance. We plan to continue having similar kinds of discount cards and are offering our customers high quality cosmetics as usual. If a customer buys GEL 50 worth of youth products, s\he gets a 10% discount card.
Q. Has the number of customers in Ici Paris shop salons decreased during the recession and by how much in accordance with last year?
A. During the financial downturn, the number of Ici-Paris customers has decreased by 10%. The recession has influenced our customers’ expenses as they have reduced their demands for buying products during the economical downturn.
Q. In 2009 you had a presentation of U.S. Smashbox and Decléor cosmetics, do you still continue partnership with these brands and how popular were these brands during 2008?
A. We are continuing our partnership with Smashbox and Decléor productions. Before choosing a partner, we always think carefully about what will be popular and successful among our customers. Smashbox and Decléor cosmetics have really been demanded among Georgian customers and the sales volume of these brand products proves their popularity.
We knew from the beginning that these two brands would almost certainly become popular. Since 2007 Smashbox and Decléor have been some of the most well sold and demanded products in our branches. Ici-Paris always tries to have long term relationships with its partners and at the moment we are thinking about enlarging the distribution of products for 2009.
Q. Please name the bestselling brands of the year 2008.
A. According to the New Year period data, the bestselling brands were: Yves Saint Laurent “Elle”; Yves Saint Laurent “L” Homme”; Antonio Banderas “Blue Seduction” (for men and women).
Q. Which are the most expensive brands that your company offers to its customers?
A. The most expensive brand on offer at our company is from Bugatti’s collection of gold-covered perfume, which costs GEL 6,720.
Q. Many celebrities have their own perfume lines. How successful is this approach in the perfume business? Which celebrities’ perfume lines are the most popular in Georgia?
A. Celebrities’ perfume line products are also very demanded among our customers. People like to buy famous people’s brands. As everyone has different taste, demand for such kinds of products increases. Our clients are of refined taste and therefore choose the right brand for them from the plethora sold in the Ici-Paris network.
Q. What kind of special discounts have you had on your products in 2008?
A. Traditionally Ici-Paris has different kinds of discounts at different times in the year. Most of them were dedicated to festive celebrations: Valentine’s Day, Mothers’ Day, Women’s Day and also the Christmas discount which starts from December 1 and lasts until 15 January. We also temporally have discounts on different products.
There are some special brands on which we can’t impose heavy discounts. On the Chanel brand, we aren’t able to give more than a 10% discount as well on Yves Saint Laurent products. Discounts on these brands’ products must be recommended by the brand representatives themselves; otherwise we won’t be able to give even 10% discounts. We should act in accordance with these brands’ wishes. All in all we are continuing to offer special discounts to our customers, as marketing sights are always important for our company.
Q. There are several other companies in Georgia engaged in the perfume business, what are the top features that Ici-Paris relies on to remain a competitive brand in the country?
A. I agree that the competing market is quite large in the perfume business in Georgia. Our company manages to keep the leading position on the Georgian market with the help of its strategy. Our working day starts and ends up with thinking about how we can improve our work. We realize that thinking about improving things all the time is very important for the company and that’s why we are able to remain in a leading position in terms of our competition. The perfume business market in Georgia is not so large and is actually quite limited, that’s why the level of competition is high.
Q. Did you open new branches or shop salons in 2008 and if so, how many?
A. Yes we opened one branch shop on Leselidze Ave, despite the local and global financial problems.
Q. Ici Paris was going to take a part in the Cannes expo in autumn 2008. What was the success of your company at this exhibition?
A. We did take part in the Cannes exhibition and quite successfully too. These kinds of events have become part of an annual ritual of business trips. While taking part in such events we are able to meet our partners, discuss ideas, review past results, decide on future plans and listen to recommendations. Our company will always be happy to participate in such exhibitions and we will continue to stay active in this respect.
Q. Which are the exclusive brands that Ici Paris imports to Georgia?
A. We have nearly 110 brands. Among them I can name Chanel, Yves Saint Laurent, Gucci, Dolce & Gabbana, Bvlgari, Burberry, Jean Paul Gaultier, Carolina Herrera, Gianni Versace, Ermenegildo Zegna, Calvin Klein, Boucheron, Lacroix, Rochas, Bruno Banani, Gabriela sabatini, Bourjois and so on.
Q. Mostly from which countries do you import the products?
A. France, Italy, Spain and the USA are our main partners and these are the countries from which we mostly import products.
Q. The partners of Ici Paris include well known brands such as: Chanel, YSL, Carolina Herrera, Versace, Bvlgari, Jean Paul Gautier, Davidoff, Calvin Klein, Gucci, Dolce & Gabbana, Davidoff, Versace, Burberry and Hermes. Have you cancelled your partnership with any of these brands recently and which new companies appeared among Ici Paris’ partners in 2008?
A. We still continue cooperating with these brands, but in 2009 we are planning a presentation of two new brands. I don’t want to speak about it beforehand and reveal which of the new brands will be added to our network, but I guarantee that The FINANCIAL will be one of the first to hear about this novelty at our company. We are still having negotiations with the officials of these new brands and I can assure you that bringing these famous brands to the Georgian perfume market will cause a sensation for our customers.
Q. The company also offers online sales, how demanded has the direction appeared to be for Georgian consumers?
A. In my view, online sales aren’t quite popular enough yet among Georgians as they are more oriented on retail trades. I am sure that online selling will also become popular in the near future, but at the moment it’s not as developed as it could be.
Q. What kind of special prize draws have you had in 2008 and is your company planning to have some more in 2009?
A. We have continued offering our customers the New Year prize draw where people are able to win 24 different prizes and as a special prize they can even win a car.
Q. How has the economical downturn changed the company’s plans for 2009 and what new additional services will you offer your customers?
A. Our vision has changed in the way that we have become more pragmatic. The economical downturn made us rethink our strategy and we became sure that careful politics is the most needed at the moment. We have also tried to shorten company expenses in order to maintain financial stability. If the company’s incomes don’t rise, at least they shouldn’t decrease, that’s our mission at the moment. The recession taught us to be more careful and that’s what we are doing now.
Q. What are your plans for 2009?
A. Firstly our plan for 2009 is the presentation of the new brands. If the company’s monthly turnovers are acceptable then we will start to think about developing our aims in different directions. You should be purposeful and work hard in order to develop your aims. Let’s see what the next months bring us, but at the moment we should keep stability. Stability is the most important aspect of our company’s history, so we will be oriented on this issue, especially in terms of the recession, but I am sure that we will offer some novelties to our customers as well. In general we hope that the year 2009 will be positive.
Written By Tako Khelaia
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