Franchising of clothes- is one of the most popular trade formats. If, usually, in the period of five years 85% of new independent shops are closed then from those businessmen, who open their shops according to the franchising system, only 14% leave business. It means that from eight franchising shops only one shop is liquidated. Is franchising as well stable during the crisis? In what way did chains adapt their programs? What perspectives have franchising in Commonwealth of Independent States? Natalia Chinenova, general manager of SELA Corporation in Russia answers these questions.


In 2009 year our Corporation three projects started- SELA Kids, SELA small-size, SELA light. Do you pleased by the results of projects?

-  I can name 2009 year a year of cardinal changes in retail. Effeminate by progressively increasing buying interest companies happened to be in the situation when congested by goods market faced plummeting desire of consumers to buy something. The necessity of making policy decisions appeared- how to sale and where to go. Many companies went to the way of discounts with a view to attract customers by inviting price. Some companies were bent on development of new tradable lines or sub brands like subsidiary independent trademarks.
From the first days of the crisis SELA Corporation considered 2009 year to be time for realization of new and started earlier projects. Before the crisis the online store SELA-shop, child shop SELA Kids and shops of small size- for cities with population less than 100 000 citizen had been started. The project SELA Light can be ranged in numbers of new projects.
Online store is a format completely opposite to retail. There are no shop windows, no visual merchandising, no familiar contact between a salesman and customer. Sale of clothes in Russia, practically, doesn’t develop. SELA shop was opened in 2008 year. By the end of 2009 year we got about 200 orders per month through the online- store and monthly turnover was about 300 thousand rubles.

Online sales happen to be a business which actual in the crisis. The opportunity by easy stages to examine goods, to compare value for money, to define the necessity of buying, unaffrighted by impulse buying- for that things customers like this format. SELA shops work within 24 hours, that’s why you may choose goods even at night. Any variants of paying are possible and accessible. There is a delivery to any comfort for customer place.

For 2009 year, sales in online store SELA– shop increased to 150-200 things per day and a turnover increased by factor of 10.

The next not less interesting project- is the shop SELA Kids. In 2008 year two shops of this format were opened- a partner’s one in KRASNODAR and another, our own in Moscow.

In the shop there are only child clothes- the age of customers under 11 years of age. The shop has comparatively inconsiderable floor space- no more than 100 m2. During the crisis 8 shops were opened accordingly to franchising system in different cities of Russia.
SELA shops of small size- are the shops which can be opened in the cities with population less than 100 thousand of livers. They can have small floor space with narrow assortment of goods. 10 such shops were opened.
SELA light- is the shops of transition period. The Corporation doesn’t plan to develop such the format. In point of fact, this is the opportunity for a partner to open a shop in the place of previous shop which was closed in the period of the crisis.
During the crisis our partners opened 11 shops of this format.

In all, during the crisis our franchise opened 40 shops in different cities and regions of Russia. The total amount of shops working under SELA brand in Russia is 445.


-  What will happen with new projects in 2010 year? Will you accentuate the development of some one project or you will develop everything equal?

-  All the projects, starting and beginning will work in 2010 year. We don’t plan to close some of them. The accent will be put on widening of prevailing shops and on equal development of all the formats.

-  Does your chain develop in Ukraine, Kazakhstan, Byelorussia, Armenia, Georgia, and Moldavia? Can you compare conditions of franchising in our countries and in these countries?

-  The biggest demand of franchise has been still in Russia. Nevertheless, I should say that Ukraine, Kazakhstan, Byelorussia actively develop. Activity, in comparison with Russia, is ratable, but number of population in these States is much lower than in our countries. Today, about 70 SELA shops work in Ukraine and in Kazakhstan and Kirghizia there are about 30 shops, in Byelorussia- 7, in Moldavia- 4.
Legislation in respect of franchising in former Soviet Union is practically the same. There are no specific differences.

A high demand on franchises in Russia can be explained by many factors inclusive of development of small business, the support on the State level, relative stability (even in spite of the crisis) and a huge rapid growing market.

Certainly, there are some differences in technologies of franchising between countries of European Community and Commonwealth of Independent States. For example, SELA Corporation doesn’t collect lumpsum payment or royalty from the partners, as distinct from a prevalent practice in European countries. Nevertheless, we give franchise package of standard documents with technologies of trademark and not lee than two times per month we send to him operational methodic recommendations, do audit of the partner’s business and give all kinds of counseling assistance. I should say that all the consultations for the partners from the side of the trademark SELA are free of charge, beginning with development of a design project of a future shop and finishing with a visit of visual merchandiser to the partner’s city for staff training.

-  How often do franchises from different regions meet each other? How is the system of sharing of experience organized between franchisees?
-  The partner’s working meetings are organized biannually. On these meetings the partners form the order of seasonal collection, undergo training and communicate with one another.
-  I should say that the partners visit each shop even if they are situated in different countries. The Corporation encourages correction retraction and sharing of experience.  Information sharing is realized by managers with the help of a corporate informational bulletin. The bulletin appears once a week, franchise get it by email.

-  You said that you weigh new partners- franchise. What criterions are the most impotent? Did they change in 2009 Year?

-  Any person which want it can become a partner of SELA Corporation and to open own business. With that, a probable partner should has a ready shopping space (probably, his own or with a rent period contract), he must enter deposit on opening a shop, to sign suretyship agreement or give another guarantees of his paying capacity. Besides, he should have some sum for the first purchase of goods.

Requirement to partners in 2009 year practically didn’t change.

Monthly plan tasks are settled for the partners and there is some selection KPI, discharge of which is controlled by The Corporation. Informational letter about result of enterprise’s work is sent to partners monthly.

Apart from audit and training programs there are franchising motivation package. It’s an annual contest “Gold mannequin”. The laureates of this contest get additional bonuses which actual during next year.

Any person which want it can become a partner of SELA Corporation and to open own business. All the projects which were neglected or which developed during the crisis would work in 2010 year too.