La Rinascente at core of CRC's global ambition
Central Retail Corporation has taken a big step in its global expansion march by scooping up la Rinascente, Italy's leading luxury department store, for Bt10 billion.
"We'll focus on la Rinascente to spearhead the group's global expansion, while our Central brand will be used for expanding in Southeast Asia and China," Tos Chirathivat, CEO of Thailand's retail giant, told a press conference yesterday. CRC plans to build la Rinascente into a worldwide upscale brand within three to five years by opening at least one store every year over five years. The new branches would be located both in Italy, such as Rome and Venice, and markets showing potential such as the Middle East, South America and Asia, including China. The addition of la Rinascente would support CRC's strategy over 30-40 years to broaden its retail spectrum to upscale department stores, he added. Kanokpan Pongaraya, head of the Thailand Trade Centre in Milan, said CRC had to compete with the premium department store's founder. The founder, who now holds only 4 per cent, offered 200 million euros (Bt8.8 billion). The deal costs CRC 260 million euros. "The deal, which started on May 2, will take a month to complete, now that CRC has already been officially informed that it won," he said. The deal will create great export opportunities for Thai goods. Central Group also gets a shortcut in its marketing strategy to take its business abroad. With a history of over 150 years, la Rinascente is the top high-end brand and most famous department store in Italy as well as one of the best department stores in Europe. It features the broadest selection of prestigious brands of men's, women's and children's collections of precious accessories, cosmetics and lingerie as well as houseware and a selection of indoor designs. The flagship store is in Milan, the world fashion capital and the main shopping city of Europe, which is fully provided with world-class elite brands. "The purchase of la Rinascente will allow CRC to strengthen its relationship with key suppliers in Europe. The move also complies with our policy to usher local suppliers into global markets," Tos said. La Rinascente racks up 350 million euros in annual sales, and will contribute 15 per cent to CRC's revenues this year, he said. CRC expects its own sales to reach about Bt100 billion this year. "We have recognised the acquisition of la Rinascente as a medium-size investment that will reach the breakeven point within eight to 10 years," he said. Tos said he has known la Rinascente's CEO Vittorio Radice for 10 years. Radice brings more than 20 years of experience in the field of international department stores. He has an excellent business administration sense and an efficient and skilled management team. "With the acquisition, we will not get only la Rinascente department store, but also the world's best management expertise," he said. All the executives on the management team at la Rinascente have agreed to stay on with the department store after the acquisition. "The purchase of 100 per cent of la Rinascente is in accordance with our expansion strategy by mergers and acquisitions that will make Central Retail readily advance. "We are still looking for investment opportunities like this both in Thailand and in China, and in other Asean and European countries," he said.