BusinessMagazin

Tag: business

  • The fortune of Dorobanti cafés

    A little after lunch, all is quiet on Radu Beller. The businesspeople that had a cup of coffee in the morning or had lunch are already back at the office. Waiters are getting ready for the second wave of customers for the day: the afternoon bunch, who gave a relatively deprecatory meaning to the ”go out for a cup of coffee in Dorobanti” phrase. More concerned about showing off than about business or about the simple pleasure of sitting in an outdoor restaurant, this type of customer, as well as the overall increase in revenues over the last few years have been the most important causes for the development of coffee shop poles in Bucharest.

    Radu Beller was the first such pole because it is precisely on this street in the Dorobanti quarter that the after-1990 history of coffee shops and restaurants in Bucharest began – once the Deutschland confectionery shop and the White Horse restaurant opened some time around 1997. ”I bought this house in 1995, when I came back from a trip to London and decided to get my own pub,” recalls Cristian Paun, the owner of White Horse and La Belle Époque restaurants, about the house in Dorobanti where he opened the first pub-restaurant in the capital. Coffee shops and restaurants started to develop on Dorobanti and Radu Beller since 1999, with the opening of Nova Brasilia and, some time later, of the High Heels or The Belle Époque.

    In June 2009, ten years from the start of the development of the area, more than ten restaurants and coffee shops are lining the street. Quite a crowded street section, which however, attracts more than one million customers a year, who drink more than two million cups of coffee and generate more than ten million euros. It is very important that anyone opening a coffee shop and wanting to have it blend in with the area, should place it right there, in those several tens of metres. Around 2006, the area that had started to develop as a business meeting place began turning into a fashionable location.

    ”2006 was the year when a sort of small bourgeoisie started to develop in Romania, people who had made money from real estate speculations, from selling some property given back to them by the state, from various other small businesses, who immediately saw Dorobanti as an area that had shut them out until then, which they suddenly could afford. This is how they started to come,” says Cristian Paun explaining how the customers of the area changed. To real estate agents specialising in that location, the flood of customers was a significant leap of the market. Alexandru Preda, retail broker of Colliers, says that spaces in Radu Beller are rented as soon as they are put on the market. Too bad there are not too many of them: most of the existing spaces have been occupied by the same coffee shops for years. ”Almost no one has closed up shop on Dorobanti until now,” says Preda, who is carefully watching the area and says he has customers for each space that comes up.

    Radu Beller, however, has become too small a place for all the people in Bucharest who wanted to go out for a cup of coffee. Especially since as soon as a street is known as a business pole, it starts to become fashionable, and the business pole tends to move, though somewhere close by. Which is why in 2003-2004, when Dorobanti became a crowded street, other areas started to develop. One by one, Dorobanti (from Piata Lahovari towards Perla), Episcopiei and Dinicu Golescu streets, the University area and then Decebal developed. All these streets together with Radu Beller generated almost 100 million euros in business in 2008, as calculated by BUSINESS Magazin.

  • The Year of Spas

    This year alone 10 million euros have been invested in Romania in opening new spa facilities, with players on the market announcing they will continue to allocate money for developing the existing locations. May appears to be the month of spa businesses, considering that the record for the largest spa on the Romanian market has been broken twice in a week’s time. At the beginning of the month Eden Spa announced a 4 millioneuro investment in The Spa within the future Hilton Sibiu hotel, a 2,000 square-metre location.

    One week later, the Cocor Turism group launched Cocor Spa in Neptun Black Sea coast resort, a 6 million-euro investment in a 3,000 square-metre area, which has become the largest such centre in Romania. ”The spa covers the 3 floors of a newly-built area and occupies 3,000 square metres, whilst services include four different segments – clinique medical spa, wellness aging, spa suite and thermarium & pool,” says Lacramioara Moroianu, general manager of Cocor Spa.

    The spa, the only Romanian spa affiliated to the International Spa Association, occupies 3 floors of a newly-built wing, and is part of the 18 million-euro investment in renovating the hotel. The former 2-star Galati hotel has been turned into the 4-star Cocor hotel. As for the spa, it offers spa services, traditional treatments, facial therapies, exfoliations and wraps. The third floor accommodates the pool that overlooks the sea, a jacuzzi, showers and saunas. Representatives of the spa say they target 25 to 60 year-olds with higher education, average and above average incomes looking for health, relaxation and wellness services. Additionally, they want to turn Romanians using spa services into clients of the Neptun spa, and also make foreign tourists perceive Romania as a potential destination for a spa holiday.

    Apart from Cocor Spa, the Cocor hotel also includes an underground two-level club, Club Vision, a 350-seat conference hall and a restaurant that can accommodate 500 people. ”We plan to expand Cocor Spa in Bucharest with a Day Spa on the 3rd floor of Cocor Luxury Store, which will open on November 15th 2009,” the general manager concluded. The other investment, officially launched in May is in Sibiu – the future Hilton Sibiu hotel has seen the opening of The Spa, managed by Eden Spa, which also operates a spa in Bucharest, after closing down the one in Monte Carlo Palace. The relaxation offer includes hot stone and essential oil massages, milk and honey baths, rose, lavender and honey wraps, facial treatment with organic ingredients, Finnish and steam sauna. The Spa is part of a five-star complex with 115 rooms and apartments, four restaurants, a bar, five conference rooms and an executive lounge.

  • First Business is Never Forgotten

    He wants to turn Madrid Open into the most elitist tournament in the world. He set a five-year deadline for himself to reach a 30 million euro net profit. Until then, he is waiting for the crisis to pass, a crisis that saddens him ”greatly”, but he has a lot of consolidating to do for the businesses in Romania. Together with Ion Ion. Ion Tiriac concentrates on tennis 5% of his time. As for the rest, he says that his businesses in Romania take up ”too much time”.

    Business grew very fast in Romania, Ion Tiriac now feels. He admits, though, that his group has to go through a process of consolidation, and in parallel, of gaining market share, for which the crisis is quite a good time. Consolidation started for Ion Tiriac a few years ago, when he says he sold everything he had in the US and France to focus on Romania, because he could not have controlled his businesses otherwise. Now he is successfully sharing the control. ”I have high hopes for Ion Ion – thank God he has 8,300 people working for him and he is a down to earth person. The boy has an education: he went to college in the US, has an MBA from Irwin; as for me, what did I do, I was an athlete and went to college in Romania in the ‘60s?”

    The crisis caught most people unprepared, the businessman believes, who congratulates himself that he prepared in good time and opened lines of credit to have access to money, and also saved something up. Otherwise, he would have had a really hard time, considering his fields of business. ”Cars? Real estate? Nothing sells anymore. Fortunately, I am not afraid, I saw the crisis coming and I have enough cash to swallow the pill; the crisis does cost me money, but I can survive without having to sell an apartment; I can’t sell the 4,000 euro/sqm ones, and I can’t sell the other – 1,000 euro/sqm ones, either.”

    As for his tennis tournament in Madrid, in 2002, when he first organised it, Ion Tiriac had to come up with three million euros. He regarded it as an investment instead of a loss. The following year, he came up with one million. He broke even in the third and starting making profit in the fourth. ”After three years, this tournament became the most important social event in Madrid: there is not one important person who wouldn’t get a box at Madrid Open,” Tiriac says. Though he did not sell all the tickets, Ion Tiriac is optimistic, because his system will start generating more money in just a few years.

  • Saved by the Parties

    The year 2009 is the first when JW Marriott, the hotel with the highest revenues on the market, will see a two-digit decline. After having ended last year with 40 million euros in revenues, the owners of SCH Grand see 10% lower figures for this year.

    ”There have been years of decline before, but we were talking about a few percentage points then,” says Meda Vasiliu, the hotel’s sales manager. Promoted to a top management position at the hotel in 2006, Meda Vasiliu says that it is difficult and dangerous to talk about decline at this time: ”I believe that by talking about the crisis we are making it worse, instead of looking for alternative solutions to drive it away.”

    The marketing and sales manager, however, says that the decline of demand on the five-star hotel market as a result of the cut in the spending budgets of the corporate clients applies both to room bookings and to conferences and events. Marriott derives 50% of its revenues from room bookings and the other half from conferences and events, and bar and restaurants, which seem to be less affected by the economic crisis, at least for the time being. Intercontinental hotel, now under refurbishment, anticipates one of the most serious declines on the market, by almost 27%.

  • Who’s Afraid of the Dentist?

    When he decided, back in 2004, to open his first dental clinic dedicated to corporate clients in Bucharest, everybody told Michaell Shkurko this was insane. Born in Russia 50 years ago, raised in Israel and trained as a stomatologist in Romania and Italy, Shkurko set up his first clinic on the Romanian market in a villa rented out on Bucharest’s Ferdinand Boulevard.

    Dental Plan, which in the meantime has moved headquarters to Tipografilor Str. (N Bucharest), now has around 5,000 subscribers via the contracts Michaell Shkurko has signed with Petromservice, Volksbank and Bancpost (this compares with the over 70,000 subscribers each for Unirea Medical Centre and Medicover – clinics specialising in general medicine). Last year, Dental Plan posted half a million euros in turnover, slightly above the 400,000 euros originally invested in the business by Michaell Shkurko.

    For 2009, Michaell Shkurko expects a turnover more or less similar to last year’s from the Dental Plan clinic, but his businesses will reach one million euros this year after completion of a second clinic – which will be smaller than the current one, and will also have a lab and a training center. Five years from its opening, Dental Plan remains the only clinic opened in Romania on the corporate clients segment. For individual clients, however, the market is very fragmented, consisting of around 11,600 practices throughout the country.

    Oana Taban, in turn a trained stomatologist, set up her own clinic ten years ago, by extending her individual practice. ”Initially I had one single dental chair, then realised I had too many patients and started to hire staff,” says Oana Taban, owner of the four Dent Estet clinics in Bucharest, who says she now derives 1.5 million euros in turnover. Apart from the four clinics, Oana Taban also invested in a business that has mainly attracted expats – eco clinic Green Dental, operated together with Cristi Costachescu and Cristi Misailescu, founders of Velvet Dental, Dent Estet’s main rival. Green Dental is affiliated to Green Dentistry, a project initiated and funded in 2004 by the European Union, with its main concern being eco-friendly management of dental waste.

    Traducere de Loredana Fratila-Cristescu si Daniela Stoican

  • Business on the ski track

    In fact, Austria has been the No. 1 destination for Romanian tourists this winter season. Over 30% more Romanians have been willing to travel over 1,500 kilometres and spend 650 euros per person on average for a 7-night package in Austria.

    The same standard applies in resorts throughout the country. Firstly, the pistes fall into three categories – blue ones are easy, red ones are of medium difficulty, and the black ones are the most difficult. The pistes are usually accessible by means of a gondola or a cable car that takes skiers up, to a main centre. From there, they take ski-lifts or by chairlifts (increasingly rare) and are taken to the higher pistes. Every year, Austrian resorts invest over 50% of the season’s earnings in developing the ski infrastructure. In the last season, investments totalled 557 million euros, with a significant share (203 million euros) being dedicated to developing the artificial snow infrastructure. Additionally, the 2008- 2009 season saw investments worth 122 million euros in building a new piste, ski lifts, car parks and other facilities.

    The après-ski offer (i.e. after-ski entertainment) has also become a tradition in Austria. Cable facilities close at around 4 PM, after which skiers find their way to outdoor or indoor bars. One of the most famous is Elizabeth in Ischgl, the bar on the ground floor of the English-style Elizabeth hotel, where tourists dance in ski boots, while the entertainment is provided by girls dancing in traditional Tyrolean outfits.

    Skiing seasons are opened and closed by major concerts. For instance, Ischgl saw the season end on May 2nd with a Kylie Minogue concert, as part of the Top of the Mountain concert. Additionally, investors and the Austrian authorities are spending significant sums into extending the ski season. Whilst December, January and February are considered to be peak months, one can ski for more than 6 months on glaciers, from November to May. And, given that the quality of snow is greatly prized, 203 million euros were invested in developing the artificial snow infrastructure alone, so over 60% of Austrian pistes are covered with artificial snow.

  • Feel free to cream off the milk

    Shmulik Porre, president and CEO of Tnuva Romania needed only one week to weigh the parent company’s proposal to take over the reins of the Romanian subsidiary. ”It was time to make a change in my career,” says Porre, who was general manager of the largest paint manufacturer in Israel for five years before accepting Tnuva’s job offer.

    It’s been over a year since then, and, when looking at the progression of the company he is running, Porre has no reason to regret making this decision: Tnuva Romania boasted the fastest growth rate on the market in 2008, when it reached 20 million-euro sales. This being the first full fiscal year since the company’s products hit the stores, it was in a way natural for its progression to be more spectacular than that of other milk processors. Porre takes pride in having built a project from scratch on a very competitive and dynamic market, especially since he says he is expecting a 50% turnover growth this year. So far, he has been among the few to make such appraisals; the other dairy processors expect 1-2% rises on average for 2009, at least 4-5 times lower than in past years.

    ”We think the industry will go up this year, as well, but we don’t believe it will be a two-digit rise, like in previous years,” says Traian Simion, general manager of Albalact Alba Iulia, the only large processor listed on the Bucharest Stock Exchange. The dairy market approached 1.3 billion euros in 2008, with dairy products getting top billing in supermarkets and hypermarkets over the last few years. For many years, the market saw a two-digit annual rise, surpassing all growth rates on consumer goods market.

    Now, companies anticipate that market moves have more to do with difficulties generated by the current situation, especially for small processors (which are faced with funding difficulties) than with anything else. Companies need to consolidate their position on an increasingly crowded market, with this year expected to be rich in transactions. For those that have businesses to sell, the timing is quite unfortunate, because the price has gone down significantly against the past few years, while buyers hold all the trump cards in negotiations and can afford to wait until a good deal comes along.
     

    Traducere de Loredana Fratila-Cristescu si Daniela Stoican
     

  • Turismul de afaceri, un pariu pierdut?

    Primul an in portofoliul fondului de investitii GED a fost complicat pentru Happy Tour. Agentia a fost cat pe ce sa piarda pozitia de lider al pietei de turism, si-a schimbat managementul si organizarea, iar peste toate acestea a venit si reducerea bugetelor de calatorii. Reducere care a reusit din primele luni ale anului sa injumatateasca piata.

    De fapt, s-au indeplinit destul de putine din asteptarile lui Gabriel Ionescu, directorul general al Happy Tour recrutat de GED Eastern Fund II pentru a conduce un viitor grup de agentii de turism lider absolut pe piata. Planurile GED din momentul recrutarii lui Gabriel Ionescu se faceau imediat dupa preluarea liderului agentiilor de turism, Happy Tour (in decembrie 2007, intr-o tranzactie estimata la 10 milioane de euro), care ar fi trebuit sa¬ fie urmata de alte achizitii de pe piata de turism de business. Intre timp, planurile GED s-au schimbat, iar fondul de investitii a declarat pentru BUSINESS Magazin ca “in momentul de fata nu avem in vedere (sa achizitionam – n.r.) nicio companie de turism romaneasca” si ca “in sase luni ne asteptam sa finalizam una sau doua tranzactii noi, niciuna legata de industria turismului”.

    Planurile spaniolilor de la GED la achizitia Happy erau de a creste in urmatorii 3-5 ani mai repede decat piata (care avea la momentul tranzactiei cresteri de 20% pe an) si de a consolida pozitia de lider prin achizitia altor agentii si integrarea lor in structura Happy, avand pregatit in acest scop un buget de 15 milioane de euro. “Ei (GED – n.r.) nu si-au modificat planurile initiale de achizitii, iar cand asta se va intampla, va avea loc o consolidare a businessurilor, o fuziune cu compania noupreluata”, spune Gabriel Ionescu.

    Primul sau obiectiv la Happy a fost reorganizarea companiei dupa modelul corporatist, Happy Tour fiind anterior o afacere de familie fondata in 1996 de Nicolae si Carmen Demetriade. “A fost intai o tranzitie a actionariatului, apoi a managementului si acum a stilului de lucru, a modelului organizational. Inainte era ticketing, turism extern, turism intern. Acum avem corporate travel, MICE (meetings, incentives & corporate events – activitati dedicate companiilor – n.red.) si leisure”, explica Ionescu, care a restructurat intai departamentul financiar, apoi a creat o echipa comerciala, specializata in servicii cu clientii. Directorul general spune ca vor urma introducerea unui sistem de management al informatiei, apoi se vor cheltui cateva sute de mii de euro pentru marketing si apoi se va trece la restructurarea portofoliului de clienti (“daca din 100 de clienti, cu trei ai o relatie contractuala care nu e in favoarea ta, de ce ai mai continua-o?”).

    La inceputul acestui an, Gabriel Ionescu estima ca afacerile Happy vor creste in acest an cu 5%, bazandu-se pe faptul ca agentia are servicii noi, ca au fost reinnoite contracte care erau pe punctul de a se finaliza in urmatoarele luni, dar si pe faptul ca au fost semnate contracte noi. Gabriel Ionescu admite ca au fost si companii care au renuntat la serviciile Happy Tour, dar ca, per total, numarul de contracte noi a fost mai mare decat cele la care s-a renuntat. Numarul de clienti-companii este acum in jur de o mie, potrivit lui Ionescu, dintre care peste 300 au avut un buget de calatorii de minim 50.000 de euro in 2008. Este drept, admite directorul general, contractul nu iti aduce garantia ca sumele prevazute se vor si consuma. Industriile in care activeaza clientii mari ai agentiei sunt farma, IT, FMCG (bunuri de larg consum), energie, constructii, agricultura, auto. Printre clienti se numara si Medicover, compania din domeniul serviciilor medicale pe care Ionescu a condus-o, vreme de trei ani si jumatate, inainte de a veni la Happy Tour.

    Nici asteptarile pe care le avea fata de cifra de afaceri nu i s-au indeplinit lui Gabriel Ionescu. La Happy, ca de altfel la mai toate agentiile de profil, criza s-a simtit in incasari inca de anul trecut: Happy Tour a avut afaceri de 51 de milioane de euro, crescand cu aproape 5%, sub estimarile de 54 de milioane de euro de la inceputul anului. Profitul a fost insa in crestere fata de 2007 (cand cifra de afaceri a fost de peste 49 de milioane de euro, la un profit de circa 1,8 mil euro). Ionescu spera sa atinga pragul de 54 milioane de euro in acest an, dar cert este ca nu se mai poate vorbi de crestere la nivelul acestui an, iar majorarea de 5% a afacerilor Happy Tour, estimata de Ionescu la inceputul anului 2009, s-a transformat acum in scadere. “In luna martie a mai rasarit putin soarele, dar fata de martie 2008, rezultatul e inca mic. Piata de travel a tot scazut, incepand cu luna octombrie, pana inclusiv in februarie. Mi-e greu sa cred ca a doua jumatate a anului va putea compensa scaderea inregistrata in prima parte”, spune Ionescu, care estimeaza ca in primele trei luni ale anului piata de business travel a scazut cu 35-50%, si cam la acelasi nivel se situeaza si evolutia afacerilor Happy Tour.

    Ion Antonescu, Marshal Turism: Cam toate firmele taie din cheltuielile cu deplasarea, unele pana la zero

  • The rise and fall of a broker

    Everyone knows Petru Prunea, 63, to be an authoritative leader and a man with a strong personality. His employees at Broker know it best, as they had ended up smoking in the bathrooms of the company’s headquarters on 119, Calea Motilor in Cluj- Napoca, like high-school kids, after he had banned smoking on the premises.

    However, the company he founded and has run since 1994 was shaken by the biggest scandal on the capital market after 2000 at the beginning of the year, after the head of the Deva office of Broker was found to have defrauded customers by almost one million euros. An extensive probe of the National Securities Commission, the supervisory authority of the capital market, followed and found problems at other branches, too, leading to the harshest penalties on the Stock Exchange thus far: total fines worth 843,000 RON (200,000 euros) for the company and 22 of its employees and a five-year suspension for Prunea from the capital market. How did Petru Prunea, who developed one of the biggest businesses on the capital market, with about 10,000 customers and 15,000 shareholders, end up being held responsible for such serious wrongdoings? Those who have worked with him say that everything stemmed from his wish to control everything and from not having delegated part of the responsibilities as the firm was growing.

    ”If Mr. Prunea had the inspiration to work more closely with the members of the board of directors in making decisions, maybe things wouldn’t have got where they are now,” says Anton Ionescu, 68, Broker’s third shareholder, who controls 4.16% in the company. He took over as chairman of Broker in March, after a ‘coup-de-palace’ whereby he and other members of the Board of Directors, who in turn were significant shareholders of the firm, ousted Prunea from the helm.

    ”Prunea regarded himself as the undisputed owner of the firm; he wanted to control everything and maybe this is what caused what happened to him. There wasn’t any trouble at first, the trouble started as the company was growing. When you already have hundreds of employees, very much money and the power is in the hands of only one man, trouble begins,” Ionescu explains. He says he joined Broker as a shareholder in 2005, after having concluded his political career as a deputy, which included a short stint as Transports Minister of the Radu Vasile Cabinet in 1998.

    ”I had known Petru Prunea for many years, as we were co-workers when I was the dean of the constructions faculty (of the Technical University of Cluj – i.e.). I was happy with the idea of working together, because he was one of the first people to have taken the step from socialism to the capitalist economy and founded this brokerage firm,” Ionescu recalls his first meeting with Broker.

    ”People change, they no longer communicate, no longer work with others like they used to, and show sides of their personality that may have not been visible in the beginning,” says Ioan Cartis, 73, the principal shareholder of Broker, with 8.22%.

    Petru Prunea says he has always taken shareholder opinions into account, when they showed common sense, but believes he is the only member of the board capable of running Broker, given his expertise with the capital market, after the fourteen years of almost constant growth of the firm he has run.

    A day before CNVM’s verdict, Prunea said he was thinking of stepping down as chief executive of Broker, and even sell his shares, after having been ousted as chairman by the other board members, two of which had been brought into the company by him. Now, he is determined to stick with Broker, even though he says CNVM’s penalties against it and against him could prove fatal for the firm.

  • Pygmalion in business

    When George Bernard Shaw was writing ”Pygmalion”, he wouldn’t have dreamed that his character would serve as a model for the business world a century later. Shaw’s story is simple at fi rst sight – Eliza Doolittle is a London fl ower girl with no education, who becomes the object of Henry Higgins’s bet, of turning her into a high-class lady after a few intensive lessons in English speaking and several sessions of image change. Aside from movies and stories, the Pygmalion model is now also employed in the business world. Using a few of Higgins’ tricks, image consultants claim they can actually boost a company’s turnover. Whilst on Western markets image consulting for companies is no longer a novelty, it has only this year gained more prominence in Romania, after the job had been previously performed by the PR department or by the manager’s personal advisers.

    Mihaela Berciu and Dana Sota are two of the names that have become involved in image consulting for business. The two have started out more or less the same – with a book. Mihaela Berciu released ”Tinuta pentru succes” (Dress For Success), and Dana Sota ”Frumusetea se invata” (Beauty is Something You Learn) and they have set out to use their showbiz experience to add more glamour to businesspeople. The difference is that Berciu provides image consulting services, while Sota has focused on the beauty area. ”Image consultants fall into three categories – showbiz, business and political. I think in the business world, image is all the more important since it has to be coherent and very rigorous. I felt this service was particularly needed in the business world,” says Mihaela Berciu. Now, she is a consultant at Qualians, where she organises image seminars upon request.

    The seminar, called Executive Presence, takes one day (from 9 to 5), teaches participants basic rules regarding image, how style should be adapted to each career level, and the appropriate style for a business meeting. Dana Sota was also attracted by the unexplored potential of the business world and adapted her message to the fast forward pace of the business world. As a beauty consultant, Dana Sota debuted with a ”trial” workshop, which was attended by 10 women interested in image. ”I started out by explaining the importance of constant skin care, how much can damaged hair or undyed roots can say about the woman in question, how important it is to apply foundation, mascara and lip gloss before leaving for the offi ce. However, for the next few meetings, there will also be stylists, who will show what is suited to each participant, based on their physiognomy, workplace, and basically personalised advice.”