ARMENIA, NEXT GEORGIA – ARMENIAN BUSINESSMAN SELLING UK BRAND IN GEORGIA
Written by Madona Gasanova

The Financial
/60690_Armenia,_NEXT_Georgia_-_Armenian_businessma n_selling_UK_brand_in_Georgia_/
March 22 2010
Georgia

The FINANCIAL — With investments of 2 million USD, Gagik Baghramyan,
Executive Director of Next clothing store in Armenia, has brought
the UK brand to Georgia. In 2009 the annual turnover of the Armenian
branch of Next reached 3 million USD. In Georgia Baghramyan expects to
get a larger volume of benefit, stipulated by the huge opportunities
of the Georgian market.

In an exclusive interview with The FINANCIAL Baghramyan underlines the
common interests of Armenia and Georgia. He says his country is much
dependent on Georgia; that developments in Tbilisi are immediately
affecting Armenia.

"The Russo-Georgian war affected the Armenian economy very much.

Citizens of Armenia were unable to receive certain products as a
result of the conflict. The railway was blocked and transit movement in
Georgia was restricted. The Armenian banking sector also temporarily
stopped giving out loans. In late 2009 they restored the crediting
process and decreased interest rates," Baghramyan says.

The Armenian businessman says that Georgia is a country of bigger
opportunities than Armenia.

"Georgia continues to improve its image as a tourist destination
and this correspondingly enhances the opportunities of businesses,
especially the service sector. Whereas in Armenia an entrepreneur
will manage to see benefit in a year and a half, in Georgia he will
manage to see it in 7 months," Baghramyan told The FINANCIAL.

"Next is offering stylish, good quality products in clothing, footwear,
accessories and home products. It gained huge popularity among Armenian
customers after its initial opening in the country. The main factor
that helped the popularity of Next in Armenia is the beautifully
designed two-storey shop, which is the largest in Armenia and a
synthesis of quality and cost."

"At very accessible prices Next offers various kinds of products
to every person, regardless of gender, age and social class. These
factors were determiners for finding the key to our customer’s hearts.

Next is one of the most popular stores in Yerevan. On my way to work I
frequently see people dressed in Next clothing. We are doing our best
in order to gain the same popularity amongst Georgian customers. We
should prove that we deserve our customers’ loyalty. We will work
hard in order to provide maximum satisfaction for Georgian shoppers."

NEXT Success in Armenia, NEXT Georgia

In 2009 the total turnover of Next in Yerevan was 3 million USD. This
is not a paltry sum and reaching such results with just one store
was only possible because of the large popularity of the shop. The
Armenian branch of Next was opened in November 2008. Our decision
to increase our shares in Georgia means that Next has proven to be
a profitable brand.

Q. What were the main factors that encouraged you to enter the
Georgian market?

A. The successful results on the Yerevan market persuaded us to
increase our shares on the Georgian market. We observed and researched
the Georgian market for a long time. Investing in a foreign market asks
for more caution, more detailed analyses and study of every detail.

During recent years Georgia has shown good results in almost every
field that is important for entrepreneurs. The rules on custom houses
and transparency of tax payment were a hugely positive step from
Georgian officials. At present any person, 24 hours daily can fill
in a declaration, check an account and so on. All these factors are
very attractive for foreign investors. We have serious plans for the
Georgian market and are not planning to remain satisfied with the
results that we have already reached.

Competition and NEXT’s advantages

Q. The Georgian market has already been entered by different
international clothing brands. What is the advantage of Next compared
with its competitors?

A. The main advantage of Next compared with its competitors is that
the Next store offers products for the whole family. The main goal
of Next is to satisfy a diversified segment. While most of the shops
offer products for concrete sex, age or taste, Next combines all these
under one store. We do not have any price frames. We will work on the
lower margins in order to have a large number of customers. The main
concept of Next is the satisfaction of its customers.

I respect all the entrepreneurs that are running business in Georgia.

As for our competitors, all those people who are hard workers we
consider our rivals. People who like their work and are doing their
maximum are our competitors. We are ready to compete with all the
innovations that will be offered by our rivals. Actually, competition
helps company development on a number of levels and makes companies
think about further development. The absence of competition results
in unimproved service, so we are ready to compete and continue working
on further development of the company.

Q. Which segment’s customers does Next target? Please name some famous
Armenians who shop at your brand.

A. The Next brand is divided in three parts: Next essentials, Next
regular and Next signature. Next essential is cheaper priced. For 76
GEL a customer can buy a 2 shirt and a tie. It is the best solution for
employees of middle incomes. Next signature is more expensive, as the
textiles are exclusively from France and Italy. Kid’s clothes are also
diversified from all three lines: essential, regular and signature.

Another line of Next is Next home. We would like to increase our
direction and also add Next home in our stores in Armenia and Georgia.

If you switch to any Armenian TV channel you will find a person
dressed in the clothes of Next. Most of the representatives of
Armenian show-biz are our loyal customers, also politicians and
managers. Next serves not only Armenians but also foreigners living
in our country. For example the CEO of mobile company Beeline and
his family are frequent guests of our shop.

Next is known for its diversification of style. Dressing only in Next
clothes a person can go anywhere. One can dress up and go play sport,
visit a club or party, have a B2B meeting, go to the theatre etc.

What’s more, Next offers various lines of clothes, shoes, clothes,
lingerie, bags and so on.

Q. Which fashion line does Next follow? Which fashion trends will be
offered by Next in 2010?

A. The fashion trends of Next for 2010 offer clothes for a light
lifestyle. It mostly includes casual clothes. Of course classic clothes
will be trendy too. Lots of colours will be available in the trendy
clothes of Next this year. 2010 is a year of worldwide performances,
like the Olympic championship, world championship in football and
the horoscope sign of this year – a tiger – which is a bright animal
and accordingly dictates bright colours. The logo of Next is black and
white and that means that these two classic colours will also always be
trendy in our collections. Next renews its collections weekly. In our
store customers can buy clothes that are currently on offer in the UK.

Q. How simple it was starting business in Georgia? Underline some
differences/similarities of Armenian and Georgian markets?

A. The main difference between Georgia and Armenia is that the
boarders of Georgia are more open than Armenia’s. As Armenia is
bordered mostly by Georgia it is much influenced by the processes
and business climate within the country. You can succeed in Armenia
without any interference, but still the diapason of responsibilities is
larger in Georgia. Georgia continues to improve its image as a tourist
destination and in this case accordingly enhances the responsibilities
of businesses, especially businesses that offer services. Whereas in
Armenia an entrepreneur would see benefits in a year and a half’s time,
in Georgia he would manage that in a much shorter time.

Q. What is the volume of sales that you plan to reach in Georgia
in 2010?

A. Actually we are presently competing with our Armenian branch. Our
goal is to get larger profit in Tbilisi than we saw in Yerevan. We
only just opened our store in Tbilisi in March but we still think
that the volume of sales will be larger at the end of this year in
Tbilisi , compared with Armenia. For the end of 2010 we expect to
have turnover of 5% more than was in Yerevan in 2009.

Q. During recent years there has been a boom in development of the
construction business and banking sector. What is the situation of
economical development in Armenia and how has the global recession
affected the Armenian economy?

A. Armenia has not totally emerged from the global recession but we
are seeing positive signs already. The banking sector in Armenia
has restored its previous working process. Even real estate is a
prospective field for making investments in but in the long term.

Q. Please name some of the creative business ideas in Armenia that
are not developed in Georgia.

A. Programming is currently booming in Armenia. You can find lots of
large scale companies that are focused on programming, preparing micro
chips, and are cooperating with Microsoft and Intel. As I know Georgia
has not reached similar scales of development in this field yet.

In Armenia infrastructure is very developed. It sounds implausible
that infrastructure in Armenia is more developed than in Georgia. As
considering the popularity and development of the tourism sector in
Georgia this aspect should be at a higher level. Service quality needs
improvement too. You can enter some shops and find the personnel just
drinking coffee. It is not yet a fundamentally implemented rule in
the services sector Georgia that the "customer is always right".

BIO

Q. Please tell us about yourself. What is your education and work
experience?

A. I am a graduator of the polytechnic institute of Yerevan and also
the state economical institute, the faculty of finance and credits. I
am single. Perhaps because of my priorities to be job oriented. I have
been working from when I was 16, in various fields. All my friends
call me a workaholic, but I do not think so. I just like running a
business which I can love and faithfully devote myself to.

Q. Which clothes do you prefer and which stores or boutiques do you
shop in except for Next?

A. My work position obligates me to follow a dress code. I am mostly
dressed up in classic clothes. Usually I prefer a free style and
mostly wear casual clothes, jeans and t-shirts. Since my cooperation
with Next all my clothes are from this brand, except for watches. As
Next gives me the possibility to buy everything I need from it, I do
not visit other shops. I just make order some shoes from our Armenian
cobblers. I only visit other shops for research purposes.

Q. What does Wealth mean to you?

A. Wealth is important, but for me it is mostly the ability of
realization and reaching happiness of one’s soul. Wealth is a material
ability of fulfilling plans. For me serving people, satisfying them
and making them happy is the main goal. I use my wealth to please
others and that makes me happy.

Q. Are you a frequent user of social networks?

A. I was registered on one social network but to tell the truth the
last time I visited it was a year ago. I keep up contact with my
friends with the help of email.

Q. Do you have a special recipe for becoming successful?

A. My special recipe for becoming successful includes constantly
working on improving the abilities of myself. Being hardworking is
a key factor for reaching success.

Q. Describe your day, at what time does it starts and what does
it include?

A. I cannot remember when I last had a vacation. My daily timetable
means waking up at 7 am. We open our store at 11 o’clock, but still
I come to work at 9 am. Because of the difference in time I continue
staying at work sometimes for the whole night in order to cooperate
with our UK partners. Sometimes I try to switch off from work and
make my brain rest. For that purpose I go to the theatre or find some
comfortable place to relax and talk with friends.