Fashion retailers are looking for new opportunities to attract shoppers in an increasingly competitive environment. Thus, the Russian chain Lime plans to open cafe zones in stores, which could increase traffic and the average check. Among mass clothing brands, only the Japanese Uniqlo launched a similar project in the Russian Federation before leaving the country.
The Russian fashion retailer Lime plans to equip its stores to accommodate a cafe area, a source in the retail real estate market told Kommersant. The network apparently already has an operating company for this project. According to the Unified State Register of Legal Entities, on September 15, Lime Cafe LLC was established with the main activity of “restaurants and food delivery services.” In the new company, 20% is owned by Lime manager LLC Style Trade, 80% belongs to Irina Khokhlova. Lime did not answer Kommersant’s questions.
The Lime brand was created in 2008. There are more than 90 stores in Russia, there are outlets in Armenia, Belarus and Kazakhstan, and there are plans to open a store in Dubai. In 2022, Style Trade's revenue increased by 50%, to 10.2 billion rubles, and net profit increased almost 2.5 times, to 1.36 billion rubles. "Style Trade" belongs to Dmitry Khokhlov.
Fashion Consulting Group (FCG) CEO Anna Lebsak-Kleymans says that opening a coffee shop, library, or art gallery is quite popular among fashion brands targeting a narrow group of consumers in order to emphasize the value of authorship and design. As an example, she cites the stores Oskelly, Fashion Rebels, Choux, Avgvst. Among the large Russian mass clothing chains, no one has yet announced such an initiative, the expert notes.
The Japanese retailer Uniqlo had such a project in Russia, which in February 2022 opened a store with a coffee shop in the Paveletskaya Plaza shopping center in Moscow in partnership with the ABC Coffee Roasters chain. But already in April last year, Uniqlo suspended the operation of all stores in the Russian Federation due to military operations in Ukraine, and subsequently the network’s space was transferred to other tenants. In foreign markets, the cafe-in-store format is being developed by Arket, part of the Swedish H&M Group.
After some international fashion brands left the Russian market, large Russian players moved on to active expansion, expanding the format of stores and assortment. Thus, Lime has been opening new outlets with an area of 2–2.5 thousand square meters since the beginning of this year. m, while the previous facilities occupied 450–500 sq. m. m. Next year the company plans to launch a flagship store with an area of 3 thousand square meters. m in the House of Models on Kuznetsky Most.
Senior Director of CORE.XP Marina Malakhatko estimates the costs of opening a cafe inside the store, including the arrangement of the kitchen area, the purchase of equipment and personnel, from 20 million rubles. The final amount of investment will depend on the area and concept, including the number of items on the menu, the expert clarifies.
Managing partner of Vanchugov and Partners, Alexey Vanchugov, believes that cafes inside clothing stores can be successful if the project is implemented in a limited number of locations and increases the average bill. In book chains, a coffee shop or small cafe logically complements the format and directly affects traffic and sales, he notes. But, Mr. Vanchugov adds, it is important that the third-party project does not harm the main business. Marina Malakhatko considers it logical for Lime to open the first point with a cafe in an iconic and large store, for example, in the Atrium shopping center.
Competition for customers among clothing chains is growing today. According to Focus Technologies, during the peak period for fashion retail between August and early September, stores in Moscow were able to increase the average check and traffic, but the number of purchases at the outlets decreased. Experts attribute this, among other things, to the increase in the number of operating stores and the pressure of online platforms (see Kommersant on September 15).