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3Q: ARPIM president Franz Zinsberger tackles the tricky topic of state debts to drug manufacturers, and shares his prognosis on how more resources, new medicines and family GPs could help the ailing local medical system find its way back to health »page 4

ROMANIA’S PREMIERE BUSINESS WEEKLY

April 25 - May 1, 2011 / VOLUME 16, NUMBER 14

FASHION RETAIL THE CASH HAPPY SHOPPERS OF THE BOOM YEARS ARE GONE. BR LOOKS AT HOW FASHION RETAILERS ARE HAVING TO OFFER MORE VALUE ON A TOUGHER MARKET »PAGES 8-9

Music is the food of profit for local concert promoters, who are putting together a starstudded line-up of gigs and events this summer, from Bon Jovi to B’estfest »pages 10-11

NEWS

NEWS

CITY

IBM in town

Labor of love

Richer or poorer

US tech giant IBM is considering setting up a research center in Targu Mures, which will draw on local IT talent » page 6

Labor minister Ioan Botis steps down over conflict of interest allegations relating to his wife’s EU and state funded project role » page 6

As the UK prepares to dig deep to fund the nuptials of Prince William, BR looks at the business side of the Royal Wedding » page 12

PLUS Top choreographer Jili Kylian brings ballet Falling Angels to town » page 13 The European Film Festival screens 50 films » page 13

courtesy of D&D East Entertainment

CONCERT SEASON IS HERE


www.business-review.ro Business Review | April 25 - May 1, 2011

4 NEWS

NEWS in brief

3QFranz Zinsberger

WEEK in numbers Courtesy of Image PR

107

President Romanian Association of International Pharmaceuticals Producers

How could the Romanian health system improve, from ARPIM’s perspective? I believe that we cannot have a wealthy country without a healthy population. As Romanians and Germans both say: if you have good health, you have everything you need. Expenditure on the healthcare system is 3.6 percent of annual GDP. This is among the lowest in Europe, below the EU average of 8 percent. It is important that at least in the medium to long term, Romania finds more resources for its healthcare system. Facilitating the development of the private healthcare system to a larger extent could help. Another solution would be to provide access to innovative treatment by introducing new medicine on the reimbursement list. What could the Romanian health system learn from the German one? I see one important difference in the funding of the system. The burden of people not contributing to the health system is not compensated for by the active contributors but by the state. For example, the state pays health contributions for the unemployed. I also consider the role of family doctors in Germany as an advantage as they are the ones who know best the general situation of patients’ health and also their social environment. The principle there is “as much as possible out-patient – as little as possible in-patient” and innovative and efficient products can be very valuable to implement this principle successfully. As far as family medicine is concerned, there is still room for improvement in Romania. corina.dumitrescu@business-review.ro

Photo: Laurentiu Obae

What can you tell us about the ongoing recovery of state debts for medication? The state’s debts to medical manufacturers, distributors and pharmacists are very high and their recovery is a long and slow process that deeply affects all parties. A major problem is that, since companies cannot recover their money in a reasonable deadline, the industry is still within difficulty as finally these late payments are mostly made. The problem is not only the costs of the money but also the increased risk of bad debts. ARPIM is a supporter of the European Directive on Late Payments which will be implemented in Romania too in a few years and we see it as a strong incentive for governments to become responsible economic actors. Developing new drugs takes almost 15 years and needs a long-term investment of up to EUR 1.5 billion for one new molecule. It also requires a reliable and predictable market environment.

million euros – estimated value of the contract Metrorex is auctioning for the acquisition of 16 new subway trains

IMAGE of the week Like lambs to the slaughter… Carnivorous Bucharest citizens interested in buying live lambs could do so at the one specialized fair open last week. Over 40 shepherds from all over Romania brought their stock to Bucharest to meet the demand for the Easter tradition of sacrificing lambs. A 1,000-sqm surface was set up for them, with 35 stalls accommodating 20 lambs each.

SERVICES Luxury concierge service starts local operations French luxury concierge service Radosa has launched operations in Romania. The local version of the company’s portal provides access to a range of personalized services and facilities offered to members, a portfolio of 150,000 hotels in 15,000 destinations, including a list of international air travel options. Enquiries and reservations are handled through a single central operation.

IT & TELECOM Romanian hacker breaks into European Space Agency servers A Romanian hacker operating under the code name TinKode has gained access to the servers of the European Space Agency (ESA) and posted details of dozens of ESA online accounts, including the main root account for the agency’s website and 13 file-transfer-protocol (FTP) server accounts, according to Yahoo! News. The hacker has reportedly previously cracked servers at NASA, the Royal Navy, the US Army and YouTube. However, representatives of the agency downplayed the event, saying that the main website was not affected.

35 billion ron – (approximately EUR 8.3 billion) is the amount allotted by the government to investments this year.

8.8 billion ron – (EUR 2 billion) – the sum the government predicts it will collect in the next three years through additional charges levied on taxpayers with a ‘high fiscal risk’ and following stepped-up inspections

PROPERTY & DEVELOPMENT

ing a EUR 30,000 investment. Istyle has a 125-sqm store in AFI Palace, while menswear retailer D’S Damat has a 171sqm shop. D’S Damat’s store in Fashion House is of 157 sqm.

Construction works begin at EUR 70 million Ana Tower

Den Braven Romania sees Q1 sales go up by 25 percent

Construction works at the EUR 70 million office building Ana Tower will start in three to six months, said businessman George Copos. The building is close to the Crowne Plaza hotel in Bucharest. It is expected to have a 33,000-sqm surface and will be constructed on a 3,500-sqm plot that the businessman owns close to the hotel, which he also owns. Copos is the owner of Ana Holding, and of the Rapid Bucharest football club. He also has several hotels throughout Romania, such as the Hilton and the Crowne Plaza in Bucharest, Europa and Astoria in the Eforie Nord resort and several units in Poiana Brasov.

The local subsidiary of Dutch polyurethane foams and adhesives producer Den Braven has reported a EUR 8.1 million turnover for Q1 2011, 25 percent up on the same period of the previous year. The results were generated by a 46 percent increase in exports, while local sales went up by 3 percent against a backdrop of bad weather and lack of investment projects.

New retailers open in AFI Palace and Fashion House Several new brands have been signed up by Cushman & Wakefield in AFI Palace Cotroceni and Fashion House: fashion retailers Salomon and D’S Damat, cosmetics and bath products firm Manufaktura, and Apple products retailer Istyle. Salomon has 83 sqm in AFI Palace, following a EUR 120,000 investment. Manufaktura has had an outlet in AFI Palace since the beginning of this year, follow-

Billa puts EUR 3 million into redesigning two of its stores Billa has announced an investment of over EUR 3 million into redesigning two of its local supermarkets, one in Bucharest and the other in Timisoara. The entire interior store architecture was redesigned with a focus on the fresh food area which was enlarged by over 70 percent at both units. “Almost 45 percent of Billa’s turnover is generated by fresh products. Following this investment as well as increasing our fresh products portfolio, we expect an overall growth of sales on the short run,” said Filip Cristescu, operations director for Billa Romania.


www.business-review.ro Business Review | April 25 - May 1, 2011

6 NEWS PARTNER CONTENT

Assessing and Managing Risks in Renewable Energy Projects which leads to extensive periods of time associated with higher costs for obtaining the approval of relevant urbanism documentations. Experts’ recommendations for a “one-stop-shop” approach in the licensing procedure are far from being implemented in Romania (as well as in the other European countries). The administrative procedures are complex and rather difficult and several authorities are involved. Although legal deadlines are set by law, in practice, quite often they are not complied with by the authorities. Energy production capacities are treated similar to other construction and there are no procedures shaped to RES projects’ specifics. To mitigate the above mentioned risks it is important to get knowledge about the procedures and authorities involved, before submitting the application, to make sure that location and technical aspects of the wind farm are correctly described in the application made, as further changes may affect the validity of the permits. More important is to exactly follow the procedure to diminish risks of annulment or contestations from competitors. In terms of connection to the grid we note the insufficient capacity of the grid and the concentration of developments in South-Eastern Romania, an area with low energy consumption. In early stages, connection capacity has been assigned to sometimes poorly designed projects blocking connection for more reliable ones (a large number of technical connection approvals have been issued relatively easy). In terms of costs associated with the connection the reality is that high costs are required for grid reinforcement and that the costs for connection are exclusively borne by the RES investors. In practice the connection solutions proposed by the grid operators are usually expensive and sometimes intended to cover their investment needs. A developer needs to obtain information on the grid conditions in the area surrounding the project in the early stages of the development (even before securing land), to verify if the connection will be done at the distribution or transmission level as the costs will be considerably different as well as to get familiar with the procedures to be followed and to obtain an estimation of the costs. Following its development a project will face other risks, each with its own importance and impact, such as construction risks, technology risks, market and operational risks.

Labor minister resigns following conflict of interest allegations

Courtesy of Gov.ro

In line with the European trend, in the Romanian market, renewable energy is gaining credibility among private investors as having the potential to become the next big Paula Corban industry. Despite Counsel, White & Case the significant efforts needed, Romanian authorities declared that Romania can just reach the overall target under the Renewable Energy Directive1 by relying exclusively on domestic production. To achieve the 24% mandatory target for 2020, Romania has to develop 50% of the total potential of its renewable energy sources which will involve significant investments in renewable energy projects. It is quite a challenge to direct capital to the RES sector in the context of the global economic crisis which strongly affected Romania, including in terms of energy consumption. Access to capital and capital costs are the main issues of the sector as RES developers are viewed as high risk clients (smaller size projects, higher capital costs, strong dependence on policy and regulations). Ability to identify and assess risks may increase the ability of a developer to attract investments and financing. Typical risks of RES projects come from performance of the installation, experience and reliability of the developer, licensing process and other administrative burdens, access to grid, stability of the available support scheme. Among other categories of risks, location and licensing risks may have a major influence on the development of a project. An important element of risk in terms of location comes from the concentration of developments mainly in the same area (South–Eastern Romania). Romania has a highly fragmented land ownership structure and this will bring difficulties in securing land due to usual ownership and boundaries issues, lack of cadastral measurements and land book registrations, large numbers of contracts needed to be concluded. To mitigate potential negative impact a developer needs to get knowledge about the location in the early stage of the development, it needs to determine within a given area both the capacity of the wind farm development and its suitable location considering other land-uses and restrictions. The land needs must be assessed considering turbines placement, connection installation location, access roads and infrastructure. In terms of licensing risks, with reference to the building permit, it is worth mentioning the lack of spatial planning

POLITICS

Compromised: Ioan Botis has resigned

R

omania’s labor minister, Ioan Botis, resigned last week following conflict of interest allegations. His stepping down came at the behest of the prime minister, Emil Boc, after news that Botis’s wife was working as an adviser on a EU and government-funded

project emerged on Monday evening, according to Mediafax newswire. The minster expressed apologies for the delay in tendering his resignation and added that his decision was a matter of ethics. He previously said that he did not want his actions to harm the image of the Democratic Liberal Party (PDL). The new labor minister has not yet been announced. Regarding the conflict of interest allegations, Botis denied any wrongdoing and said neither he nor his wife had links with the NGO that runs the EU and government-funded project in question. He added that his wife would also quit her position as adviser on the project. Botis is currently under investigation by the National Integrity Agency (ANI) and the Romanian Antifraud Department (DLAF). Simona Bazavan

R&D

IBM may open research center in Targu Mures

I

BM could open a research center in Targu Mures, after an agreement was signed between the American giant, represented by Thomas Revees, vicepresident global of IBM Research, and Dorin Florea, mayor of Targu Mures, in the presence of PM Emil Boc. The Transylvania Center of Excellence in Research will conduct research in domains such as health, pharma, nanotechnology, life sciences and smart cities. A working group comprising representatives of the administration and universities from Transylvania as well as international IBM Research specialists will be formed. This working group will analyze the various areas of competence and the investments necessary for opening the Transylvania research center. When these aspects are completed, the next step is to found the center and a research agreement will be signed by the parties involved, which is scheduled

to take place in June. Once the contract is signed, IBM may contribute with knowhow, expertise and patents, but the center will employ researchers from Transylvanian universities, who will be trained in IBM research centers all around the world. The center will also create opportunities to bring Romanian specialists back to the country, stimulating the absorption of EU funds for cities, universities, and the central administration, boosting the development of the Transylvania region and Romania in general by creating new jobs. The Transylvania center is part of the Digital Mures strategy from the Targu Mures city hall, which should lead to the creation of the first “Scientific City for Medical Research and Informatics.” The strategy is predicted to generate thousands of jobs by attracting important investors in IT&C and medical & pharma research. Otilia Haraga

TELECOM

ANCOM demands more detailed reporting for telecoms

T

elecom operators will have to supply the National Authority for Management and Regulation in Communications (ANCOM) with more detailed data on their local activity, including figures on investments and the value of acquisitions, as of this year, according to the regulator. The authority decided to modify reporting to reflect factors such as the telecom trends on the Romanian and international markets, the emergence of new technologies and services, along with the intention to clarify some issues about statistical indicators. Providers of landline telephony services will be compelled to report the number of subscribers, telephone lines and revenue from subscriptions. Traffic and related revenues will also be reported.

All suppliers of landline services will be compelled to report the number of subscribed households. They must also report the degree of coverage of the population and territory with terrestrial radio analog networks. Providers of mobile telephony services will report the degree of coverage of the population and territory depending on the types of networks used. Operators will also have to report the numbers of valid and active prepay cards. Statistical data on mobile internet will be reported separately in relation to the device used for connection, whether the connection was made via laptop, PC or other similar device. Reports will also take into account the technologies used for connection. Otilia Haraga


www.business-review.ro Business Review | April 25 - May 1, 2011

EVENTS AGENDA April 27 15:00 The Property Fund organizes a press meeting on the latest decisions of its general shareholders’ assembly at Radisson Blu. By invitation only.

May 4 ∫EVENT Part of the Legal Business Series, Business Review organizes the Employment event at Ramada Plaza Bucharest. For more information about registration and future Business Review events, please visit www.business-review.ro/events. May 10 19:30 Elite Art Club UNESCO (Jeunesses Musicales Romania) in partnership with the Bucharest National Opera and the Romanian Philharmonic George Enescu hold the Grand Opera Gala at the Bucharest National Opera. May 11 ∫EVENT Business Review organizes the second British Business Forum at JW Marriott Grand Hotel Bucharest. For more information about registration and future BR events, please visit www.business-review.ro/events. May 18-20 The 2011 Romanian Lighting Convention takes place at the JW Marriott Grand Hotel. Guests at this year’s event include architects Paulo Mendes da Rocha, winner of the 2006 Pritzker prize, Gaetano Pesce, and Romanian-born Canadian Dan Sergiu Hanganu. Access is by registration, within available seating. May 24 ∫EVENT Business Review organizes the third German Business Forum at the JW Marriott Grand. More information at www.business-review.ro/events.

From paper promises to solid services Though he majored in tourism, Bogdan Nicolae soon discovered that it was in the direct marketing industry that he would end up going places. Backed up by extensive professional experience, the entrepreneur is looking at regional expansion. ∫ ANDA SEBESI

Courtesy of More Results Marketing

April 28 11:00 DLA Piper Romania organizes an event on social media promotion and related legal risks. The meeting will take place at the firm’s headquarters. By invitation only.

TALENT 7

Bogdan Nicolae, general manager of More Results Marketing, became an entrepreneur in 2004, after spending eight years “Everything is measurable in this field of activity. You always know to whom you have working for one of the most well-known sent the message and how many messages companies in the field of direct marketing you have sent. Besides, you are able to at that time, as executive manager. Alquantify the feedback,” says the general though he graduated from the Faculty of manager. Tourism and intended to work and even Looking back over the development of start a business in this domain, once Nicothe business, Nicolae concludes that it is lae entered the unconventional advertisalways the start that is awkward. During ing industry he changed his mind. his first three months as an entrepreneur So at the age of 35 he decided to set up his own firm, More Results Marketing, he did not attract any customers and came close to throwing in the towel. But specialized in direct marketing. “I started he was patient with his company, which with one partner and initial capital of proved to be the right course of action. EUR 10,000. We posted a turnover of about EUR 30,000 in our first operational “For any start-up the beginning is difficult year, 2005,” remembers the entrepreneur. because you need to convince people that you are good, serious and able to do But the business grew exponentially, registering a turnover of EUR 80,000 in 2006. what you say you can do. After that other problems occur, such as financial ones. A year later, the figure reached over EUR If you intend to have a competitive busi100,000. ness you need to invest constantly in Asked why he chose to develop a busiequipment, technologies, people and ness in direct marketing, Nicolae says he know-how,” advises the businessman. liked what he was doing a lot and firmly After his first year of entrepreneurship believed in the benefits and future of this Nicolae reached 300 business meetings a industry. “It is constantly gaining ground year, of which more than a third were with against traditional marketing,” he says. customers, with Philips and Orkla Foods He was led to entrepreneurship by being among his main clients. According the feeling that he was not cut out to work to Nicolae, his business is among the top for someone else. And it was something he three direct marketing companies, with had always wanted to do. The thinking the market being split between about 12was simple: if he was able to sell direct 14 such firms at the moment. marketing services for a specific compaIf he started another company he ny, it wouldn’t be difficult for him to do it wouldn’t change anything, but he has for his own firm. He chose to call his learned a lot from his experience in busicompany More Results Marketing to show ness. “It is very important to be careful that his company would do something different, focused on results and sales. over the people you choose as your asso-

ciates, because they may come from different areas of activity and have different mentalities. You need to find a common denominator in order to make things work perfectly.” He adds: “I was lucky to meet capable people who helped me to develop a group of companies, associations, partnerships and independent firms. We form a hard core that is able to tumkey any integrated project at national level.” More Results Marketing is part of a group of six companies with 58 employees in total. The companies are specialized in direct, web and SMS marketing, IT and logistics, field marketing and courier services, with Nicolae being shareholder in three of the six companies that form the group. Turning to the budgets that a typical customer assigns for a direct marketing campaign, Nicolae says the figure starts from EUR 5,000 per project and can reach EUR 50,000-100,000. But there are a lot of challenges for any business in this field, with keeping promises being one of the most important. “We sell direct marketing integrated services, so initially the customer buys promises on a piece of paper. After that, they become services,” says the entrepreneur. While the competition is fierce in the direct marketing world, Nicolae says that only the top four-five companies play a major role on the market. He adds that More Results Marketing controls over 25 percent of the direct marketing market, while his group of six firms holds over 45 percent. Looking to the future, Nicolae plans to invest in new technology, connected services and know-how. “In addition we intend to continue our expansion in Eastern Europe – Bulgaria, Hungary, Poland, the Czech Republic and Austria. Recently we established a local partnership in the Republic of Moldavia,” adds the businessman.

anda.sebesi@business-review.ro

COMPANY PROFILE More Results Marketing Established: 2004 2009 estimated turnover: EUR 280,000 2010 estimated turnover: EUR 300,000 2011 estimated group turnover: EUR 2 million Number of employees: 10 Initial investment: EUR 10,000


www.business-review.ro Business Review | April 25 - May 1, 2011

8 FOCUS

this sort of strategy is currently in its infancy on the local market. Price perception remains the main deal breaker, but at the end of the day, tailor-made strategies produce the best results. ”It is important to note that the products themselves have become commodities. It is what they ‘carry’ with them that affects the shopper. By this we mean for example the customer’s experience in the stores, complete concept designs, brand values communicated, prestige and social status and others,” says Athanassoulas.

Local outfits look different from global image

Courtesy of H&M

Crowds in store: the opening of the first Romanian H&M outlet created a big buzz among fashion fans

Value gets fashionable for clothes companies This year the local fashion retail market will post minimal growth, with full recovery not expected sooner than 2012. But as more discerning shoppers set new trends on the market by spending less while at the same time paying more and more attention to value for money, innovation has become this season’s must-have among fashion retailers. ∫ SIMONA BAZAVAN Rationality and fashion are not exactly what one would call a perfect match, but the crisis is setting new trends by bringing fashionistas down to earth. Gone are the times when Romanians were eager to throw money away on clothes like it was going out of style. In 2010 the average Romanian dedicated 6 percent of his or her outgoings to clothing and footwear – about EUR 10.5 per capita each month in the last quarter of 2010, according to Business Review estimations – compared to 6.7 percent in 2007 and 2008. More than this, fiercer competition on the local fashion retail market is forcing

local players to come up with different approaches and new strategies in order to keep sales and raise market share. The rules of the game are changing. As shrinking personal budgets make for more demanding shoppers, delivering real value while being able to communicate this convincingly will be the main challenge for fashion retailers this time around, thinks Andreea Enache, senior marketing consultant at Ensight Management Consulting. And this trend is not going to go out of date any time soon, experts argue. “There is a general shift in all retail towards ‘value-for-money’ products. This seems like it is going to last a long time, even after the signs of crisis have gone,” Alexander Athanassoulas, president and

managing director of Stirixis, told Business Review. In this context, the entire marketing process needs to be re-evaluated and redesigned with the clear aim to increase loyalty in an industry that is volatile and fickle by nature, Enache adds. Romanians are not very loyal to brands when it comes to fashion retail and the situation will not change as long as they don’t perceive a fair relation between price and quality as well as a distinct image. “So far, the price-quality ratio is distorted and fashion brands haven’t managed to build a clear identity that easily resonates with customers. This is why the loyalty level is still low,” Enache tells Business Review. Motivating loyalty programs should help do the trick but

The fact that Romanian shoppers are less and less inclined to pay a premium price for what is in reality an average product, stands as proof that the market is maturing. “I believe that presently the local fashion retail market is undergoing some serious changes, especially because it is finally becoming clear what the low, medium, high and luxury segments actually mean,” says Enache. While prior to the crisis the mere fact that a store was located inside a shopping mall was enough for it to be perceived as premium, this is no longer the case. “This mechanism will no longer work and retailers will have to find new arguments in favor of their positioning on a certain segment,” she adds. There are considerable differences between the manner in which some brands are positioned locally compared to their place on Western markets and one such example is Inditex’s Zara. Upon entry into the market in Romania, Zara benefited from a big consumer appetite and weak competition, and so positioned itself as a medium to high market brand. But on Western markets this brand is decidedly mid-market, Enache adds. The same is true of the local Marks & Spencer network. As consumers become more demanding and competition increases, the gap in perception is expected to narrow, according to Enache. Newcomer H&M on the other hand is an example of an international brand that has positioned itself locally in line with its global profile, with the motto: fashion and quality for the best prices. Other company principles are an inventive store design and efficient logistics. H&M’s Romanian launch campaign shows that the company gladly embraces advertising. On the other side of the fence, competitor Zara has a policy of almost zero advertising. Only 0.3 percent of sales are put into

EUR 10.5 The average amount spent by a Romanian per month (Q4/2010) on clothing and footwear


www.business-review.ro Business Review | April 25 - May 1, 2011

FOCUS 9

advertising while most competitors in the industry invest approximately 3.5 percent of their turnover in marketing, says Enache. Zara’s unique selling point is to create or imitate the latest trends within a short two-week period. The new styles are available on sales floors for no more than four weeks, thus putting pressure on shoppers to buy now. This allows the retailer to discount only 18 percent of its products, compared to approximately 35 percent in other fashion retail companies.

sive development strategy, bringing seven of its eight brands and extending to other locations in addition to Bucharest. Presently, the retailer’s network includes 56 stores, the last five of which have been opened since the beginning of the year. Ten more units should begin trading by the end of 2011. C&A is another important international player with a long to-do list this year. It operates a network of seven stores locally and about eight new units should be opened throughout the course of 2011. “We are planning a long-term course and sustainable growth on the Romanian market because we believe in its potential. In 2011, we plan to open about eight new stores across the country, mostly in shopping center projects in large towns,” Cristian Codrea, district manager for C&A Romania, told Business Review previously.

Hot for the new season... investments While the economic recession has slashed personal budgets, the full half of the glass is that it has also brought cheaper expansion costs. Backed by international networks and armed with global know-how, players such as Inditex and C&A continued to open new units last year and further expansion plans are still in the cards. An increase in the availability and development of retail projects is also key as most of the local fashion retailers continue to focus on shopping malls when choosing locations – albeit now they are driving a harder bargain. The opening of the first local H&M store is this year’s biggest event in fashion retail so far. In less than a month, the Swedish retailer has opened five shops in Bucharest and one in Brasov. Two new units will follow this autumn in Timisoara and Cluj-Napoca, said company representatives. According to Laura Sinca, PR & mar-

Fashion retailers differ in their attitude towards advertising strategy

keting manager at H&M Romania, the retailer’s local business strategy is the same as anywhere else in the world. “The best location for our stores – this has been our expansion principle since 1947 when the company was set up. H&M would rather postpone the opening of a new store and wait until the best location becomes available,” Sinca tells Business Review. Judging from the preliminary results, H&M says it is off to a good start on the local market. “Romania is an interesting market,

with a young population which is passionate about fashion. We believe that there is huge potential for expansion in this country,” adds Sinca. But before H&M and many of the other players active locally even considered the local market, the pioneer was Inditex Group. The Spanish fashion retailer came to the country in 2004 by franchising two stores. In 2006 it decided to operate directly on the local market and over the next few years implemented an aggres-

simona.bazavan@business-review.ro

NEW STORES IN 2011 C&A No of existing stores 7 No of new stores by the end of 2011* 8 H&M No of existing stores 6 No of new stores by the end of 2011* 2 Inditex No of existing stores 56 No of new stores by the end of 2011* 10 *estimated


www.business-review.ro Business Review | April 25 - May 1, 2011

10 LINKS

Courtesy of B’estFest/Alex Barbulescu

Standing room only: Romanians’ enthusiasm for live music underpins a business that is thriving despite the economic gloom

tercultural festival held in the bohemian Vama Veche, will take place in August this year, as is tradition. Romania is now regarded as a notable concert location, due to its openness to both mainstream and alternative or niche musical genres. B’estfest is an alternative music festival that emerged in 2007 with a different name, B’estival. Over its previous three editions, the festival managed to gather around 150,000 spectators, according to Laura Coroianu, Emagic CEO. Due to the lack of a larger open-air venue than Romexpo, where it was initially organized, the festival took a year’s break in 2010, to return this year with a green location, B’estfest Park, just a few kilometers outside Bucharest, in Tunari. The new site aims to put B’estfest onto the international festival scene and will feature, besides its three stages, a camp site, a sports arena, a lake lounge area, arts and crafts and various food sections. Besides Mika, Skunk Anansie, Flogging Molly, Asian Dub Foundation, Lamb, Pendulum, House of Pain and Hadouken have so far been announced, with other names likely to join the line-up. Jazz and classical music also have a faithful local audience for concerts. Draghici and Kennedy will blend the two genres on May 8, as mentioned above. Meanwhile, EUROPAfest 2011 (which turns 18 this year) will unite over  300  musicians from 45 countries, showcasing jazz, blues, pop and classical at various locations across Bucharest. It will take place for a week, May 7-13, and will also feature major music contests, such as the fifth Bucharest International Jazz Competition.

Music makes millions

2011: Romania goes concert crazy Slowly but surely, Romania is building itself a name on the international concert scene thanks in part to its enthusiastic audiences. The market is growing by an estimated EUR 1 million a year, festivals are being held and tourists attracted to them, venues are being built and renovated and new players are emerging. So let them entertain you, as this is a market that, in spite of the crisis, has potential for development within and beyond the country’s borders. ∫ CORINA DUMITRESCU It all started in 2006 with the Depeche Mode concert that brought over 30,000 to the national stadium Lia Manoliu, prior to its renovation. Major names had graced Romania before, but most of them were past their peak, believed most music fans. One exception was Michael Jackson, who came to Bucharest twice in 1992 and 1996, during the golden years of his career – but this was a rarity. How things have changed. Since 2006, the Rolling Stones, AC/DC, Nelly Furtado, The Killers, Shakira, Kylie Minogue, Metallica, Lenny Kravitz, Bob Dylan and Madonna, among many others, have performed locally. And always in front of very large and responsive audiences, which has persuaded some, such as Metallica, to keep returning.

Stage set for superstars This year’s concert list already features some big names and is a work in progress. Bon Jovi were one of the first mooted artists, and their show was confirmed for July 10, in Piata Constitutiei (Constitution Square) – regarded as a top spot for concert organizers, since it is in front of one of the most famous buildings in the world, the People’s House (The Palace of the Parliament, to use its official name). This location attracted an estimated 60,000 rockers last year to the AC/DC concert. Shakira will also perform here on May 7, Romania’s own pan flute virtuoso, Damian Draghici, together with special guest, violinist Nigel Kennedy, on May 8 and Sting on June 6. Other big names lined up for this year include Mika, as part of B’estfest, on July 2, at B’estfest park. Hard rock fans have to rejoice as Judas Priest have included

Bucharest in their farewell tour, as part of the Rock the City festival, organized by D&D East Entertainment, at Romexpo, on July 1, 2 and 3. Whitesnake, Mike and the Mechanics and Prodigy, among others, will join them at the festival. Bucharest is not the only destination for artists coming to Romania. DJ Moby is returning to the country in August, as part of The Mission Dance Weekend taking place in seaside hotspot, Navodari, on August 5 and 6. Peninsula, in Targu Mures, will reach its ninth run this year, on August 2528, and is preparing its own line-up to compete with the festivals organized in the capital city. In the past, the likes of Freestylers, Gogol Bordello, Kosheen, The Rasmus, Ferry Corsten, Pendulum, Tiesto, ATB, Parov Stelar, Apocalyptica, Goldie, Morcheeba, Chumbawamba and Prodigy have all pitched up. And Stufstock, a coun-

“The estimated value of the concert market this year is EUR 10-12 million, with a yearly growth of about EUR 1 million since 2006, when it began to develop in Romania,” says Sorina Burlacu, Events general manager. The company also expects a little growth this year: “We are hoping for a slight increase against last year, as we are putting more focus on quality events, rather than large-scale concerts, but which are sure to bring profit. For larger events, the financial risks are much higher.” Burlacu predicts that the concert that will be most profitable for the company this year is Amy Winehouse’s much anticipated appearance, on August 15 at Iolanda Balas Soter stadium. “We’re expecting a crowd of around 15,000 at this concert. Of all our events, it has the largest production budget.” Coroianu said that the budget for the new B’estfest, developed in its very own green location this year, has tripled. She did not specify the figure, but said it would come out later this year. The Events general manager also spoke about the Lia Manoliu stadium, which is scheduled to be inaugurated later this summer, and the potential for growth in the concert market that it generates.

“The estimated value of the concert market this year is EUR 10-12 million, with a yearly growth of about EUR 1 million since 2006, when it began to develop in Romania,” Sorina Burlacu, Events general manager


www.business-review.ro Business Review | April 25 - May 1, 2011

LINKS 11

“Although the number of bands or artists who could fill the Lia Manoliu stadium in the current context is rather small (factoring in purchasing power in Romania and the public’s openness towards such events), these artists are the most eagerly awaited by Romanian fans.” D&D East Entertainment promised, through Marcel Avram, that it would bring the first artist to perform at the newly renovated stadium. At a press conference announcing the Rock the City festival, he also denied U2 would inaugurate the venue. As is the case with any competitive business, there has been tension between rival promoters. Marcel Avram, a German producer and manager of Romanian origins, who twice brought Michael Jackson to Romania and signs up international artists for D&D East Entertainment, drew attention to the fact that the festival organized by Emagic, B’estfest, and Rock the City will occur simultaneously. He commented that it was not fair play from Emagic to organize the festival on the days already announced for Whitesnake and Judas Priest, before they were integrated in the Rock the City festival.

Responding to Avram’s statements, Emagic officials said that when the dates for B’estfest were set, Whitesnake and Judas Priest were not included in a festival and were stand-alone concerts. The fair-play accusations were turned against the Rock the City organizers, who scheduled the festival for the same period as B’estfest, months after B’estfest had been announced, said Emagic CEO Laura Coroianu. However, B’estfest and Rock the City are aimed at different audiences, with Rock the City addressing hard rock lovers and B’estfest being more alternative music oriented. Even though it is still the first half of 2011, announcements are already being made for 2012. Rumors have been circulating of a Pink Floyd concert next year, organized by D&D East Entertainment, who also announced, through Avram, that it would bring U2 in 2012. Red Hot Chili Peppers have also appeared on organizers’ promise list for the year to come. Who will be rocking Romania next year remains to be seen – but until then, there are plenty of artists en route.

BUCHAREST’S 2011 CONCERT CALENDAR

Zucchero When: June 21 Where: Arenele Romane Tickets: RON 100, RON 150, RON 200, RON 250 www.biletoo.ro Organizer: Project Events B’estfest festival Who: Mika, Skunk Anansie, Flogging Molly, Asian Dub Foundation, Lamb, Pendulum, House of Pain and Hadouken When: July 1, 2, 3 Where: B’estfest Park, Pipera-Tunari area (10 minutes from Piata Presei Libere) Tickets: RON 125/day, RON 265/festival, RON 15/ camping access www.myticket.ro Organizer: Emagic Rock the City festival Who: Judas Priest, Mike and The Mechanics, Whitesnake, Prodigy, Papa Roach, Hatebreed, Therapy, Sabaton and Boom When: July 1,2, 3 Where: Romexpo Tickets: RON 155/day (Normal Circle), RON 230/full pass ((Normal Circle), and RON 185/day (Golden Circle), RON 280 ((Golden Circle) www.eventim.ro Organizer: D&D East Entertainment Bon Jovi When: July 10 Where: Piata Constitutiei Tickets: RON 159.8, RON 186.4, RON 372.8, RON 479.3 www.eventim.ro Organizer: D&D East Entertainment Amy Winehouse When: August 15 Where: Iolanda Balas Soter stadium Tickets: RON 130, RON 180, RON 270, RON 350, RON 600 www.eventim.ro Organizer: Events Bryan Ferry When: September 18 Where: to be decided Tickets: to be decided Organizer: One Event

Shakira When: May 7 Where: Piata Constitutiei Tickets: RON 120, RON 180, RON 280, RON 380 Organizer: Emagic Damian Draghici and Nigel Kennedy When: May 8 Where: Piata Constitutiei Tickets: RON 80, RON 120, RON 160, RON 190 www.eventim.ro Organizer: Bright Light Foundation Inna When: May 17 Where: Arenele Romane Tickets: RON 80 – www.eventim.ro Organizer: FHM Music Roxette When: May 30 Where: Zone Arena Tickets: RON 120, RON 250, RON 350 www.biletoo.ro Organizer: Emagic Suede When: June 4 Where: Arenele Romane Tickets: RON 130, RON 160, RON 180 www.eventim.ro Organizer: One Event Sting When: June 6 Where: Piata Constitutiei Tickets: RON 395, RON 295, RON 195, RON 135 www.myticket.ro Organizer: Emagic Scorpions When: June 9 Where: Zone Arena Tickets: RON 128, RON 190, RON 265, RON 350 www.biletoo.ro Organizer: Project Events Tiesto When: June 18 Where: Arenele Romane Tickets: RON 50 – www.bilete.ro Organizer: The Mission

corina.dumitrescu@business-review.ro

For more information on these events, please access www.business-review.ro/city.


12 CITY

www.business-review.ro Business Review | April 25 - May 1, 2011

UK ROYAL WEDDING

William wedding comes with royal price tag

Agerpres

The business of romance: the wedding of Kate and William doesn’t come cheap

Two billion people are expected to tune in on April 29 to see the future King of England, Prince William, wed his university girlfriend Kate Middleton. But behind the romance come the hard figures. British broadsheet the Daily Telegraph has reported that the nuptials – which have been decreed a public holiday – are going to cost the country GBP 5 billion (EUR 5.6 billion) in lost revenue by creating consecutive four-day weekends (combined with Easter and the May Day bank holiday. However, this must be offset against the GBP 1 billion expected to be generated in extra tourist revenues and sales of memorabilia – including the classic commemorative tea towels. The costs of the event itself are being shared by the Royal Family and the Middletons. Miss Middleton’s bridal gown, a closely guarded secret, is expected to cost GBP 30,000 and her maid of honor’s dress another GBP 20,000. These costs are being met by the Middleton family, along with another GPB 20,000 for their prewedding accommodation in a five-star hotel. In total, the Middletons are forecast to shell out GBP 100,000, according to UK newspaper the Daily Mail. Though this may seem a lot, the average cost of a UK wedding now exceeds GBP 20,000. Unlike most British newlyweds, Kate and William will at least save on the reception, as the venue – Buck-

ingham Palace – is presumably at their disposal for no charge. Nor did William have to break the bank for an engagement ring (which should cost two months’ salary, according to convention), as he used his mother Princess Diana’s band from her ill-fated marriage to Prince Charles. The big money is instead going on security – estimates range from EUR 5-10 million and above – and this bill is being picked up by the taxpayer. Britain’s royals still command relatively high levels of public support, William is popular, and as the bunting goes up and street parties organized, there is a buzz around the wedding (the day off did not hurt). But not everyone is celebrating. Graham Smith, of the anti-royal lobby group Republic, said, “It is not for the taxpayer to pay for any part of this event – the Windsors must cough up. If people are being told to tighten their belts, if the government is making thousands unemployed, if welfare payments are being slashed, it would be sickening for the government to allow a single penny more to be spent on the Royals at this time.” And Emma Boon, campaign director for Taxpayers’ Alliance, added, “Of course it should be an event for the whole nation to celebrate, but ordinary taxpayers should not be left with a bill fit for a king.” ∫ Debbie Stowe


CITY 13

www.business-review.ro Business Review | April 25 - May 1, 2011

FESTIVAL

BALLET

Jiri Kylian premieres Falling European Film Festival celebrates 15 with 50 films Angels at Bucharest National Opera

STOCKEXCHANGE

Reel viewing: 50 films will be shown The fifteenth European Film Festival, organized by the Romanian Cultural Institute (ICR), is taking place between May 5 and 29 in five locations across Romania. More than 50 films from 30 countries will

be broadcast, including the premiere of the Romanian film Metrobranding, a documentary by Ana Vlad and Adrian Voicu. Another first this year is the Republic of Moldova’s participation in the festival with some student films. In Bucharest, the program runs from May 5 to 15, with screenings at Cinema Studio and Cinema Eforie. The festival will continue in Brasov between May 12 and 15, in Iasi between May 19 and 22, the same dates in Timisoara, and in Tirgu Mures between May 26 and 29. Proceedings will begin on Thursday, May 5, at CinemaPro in Bucharest, with the screening of Essential Killing (Poland, 2010), directed by Jerzy Skolimowski, winner of the Grand Jury Prize at the Venice Film Festival, 2010. The Honorary Ambassador of the European Film Festival this year is Radu Muntean, director of Tuesday after Christmas (2010, Marti dupa Craciun), which has been screened and won prizes at many festivals. ∫ Corina Dumitrescu Tickets cost RON 10, while full passes reach RON 48 in Bucharest and may be purchased at Studio and Eforie cinemas. In other locations in Romania, access is free.

Angel delight: the ballet looks at the challenges and beauty of dancing The Bucharest National Opera Ballet Company is working on Falling Angels, by one the world’s most acclaimed choreographer, Jiri Kylian. It premiers nationally on May 1 in Bucharest. Dating back to 1989, Falling Angels depicts the destinies of female dancers trying to balance their pursuit of perfection with more human temptations. The work, for eight female dancers, is performed to drumming/percussion based on ceremonial music from West Africa. The show is being staged in Bucharest by assistant choreographer Nancy Euverink. The music was composed by Steve Reich, the costumes created by Joke Visser, the lighting is by Joop Caboort

and the technical supervisor is Erik van Houten. Kylian, born in what was Czechoslovakia in 1947, started his dance career at the age of nine, at the School of National Ballet in Prague. He has 92 ballets to his name so far, 72 of which were for Nederlands Dans Theater. His work has been performed all over the world by more than 80 companies and schools. ∫ Corina Dumitrescu Performances will take place on May 1, 15, 19, 28 at 19.00. Ticket information is to be announced soon by the Bucharest National Opera. For further details, please check www.business-review.ro/city.


www.business-review.ro Business Review | April 25 - May 1, 2011

14 CITY & IN TOUCH

RESTAURANT SELECTION Business Review gives you a selection of top Bucharest restaurants. You can check the full-length versions of all the reviews by our resident restaurant critic, Michael Barclay, on our website www.business-review.ro. Arcade Cuisine: International Address: Ion Cantacuzino 8 Reservations: 0753 999 333 www.restaurantarcade.ro Over the last nine years, Arcade has become a gastronomic institution in this town. It is best known for its fabulous location and vast summer terrace, but you really should go there in winter to enjoy its warm, homely villa ambiance. This is a top quality, sophisticated chophouse that can compete with the best alternative restaurants in town which could cost twice the price. Their signature dish is Pork Osso Bucco, a deviation from the original beef version. Simply superb.

to start, and a medley of chocolate lollipops at the end of your meal. It is cheaper still if you share a three or four course meal with your friends.

Divan Cuisine: Turkish Address: Franceza 46 Reservations: 021 312 3034 www.thedivan.ro Expect the usual suspects of hummus, eggplant puree, spiced tomato and so on. They have a larger selection of kebabs on offer than their competitors and this includes beef, lamb, beef and lamb combo, chicken and marinated meat stuffed in an eggplant. And unlimited hot fresh bread. It is vastly superior to other Turkish eateries and has a larger menu.

La Veranda Cuisine: Seafood Address: Crowne Plaza, Poligrafiei 1 Reservations: 021 224 0034 www.laveranda.ro Here we have a House that challenges you with a choice of preparations, and for the first time ever, they even offer you a selection of fish sauces. The standards of the House have been raised to a point that the Crowne has well and truly regained its culinary crown. The finest fish restaurant in the land, and Chef Ashlie will be delighted to come to your table to answer your questions or to give you cooking advice. Osho Cuisine: American: steak and grill Address: Primaverii 19 Reservations: 021 568 3031 www.osho-restaurant.ro

Courtesy of Heritage

April 29 Tango Emocion April 30 Le Cantatrici Villane May 1 19:00 Ballet night (Falling Angels – national premiere)

otilia.haraga@business-review.ro May 4 19:00 Felicia Filip recital

Corina Dumitrescu Journalist is reviewing local museums and what’s new in this year’s exhibitions. The museums’ white night is drawing close, an opportunity for the curious visitor to Bucharest to discover what the capital city’s cultural scene has in store.

May 5 19:00 Ballet night May 6 19:00 I Quatro Rusteghi

corina.dumitrescu@business-review.ro

April 28 19:00 Symphonic concert On the bill: Joseph Haydn, Flute Concerto 28; Wolfgang Amadeus Mozart, Concert for Flute, Harp, and Orchestra Concerto KV 299; Ludwig van Beethoven, Symphony nr. 3 Heroic. The George Enescu Philharmonic Orchestra. Conductor: Brian Wright April 29 19:00 Symphonic concert On the bill: Joseph Haydn, Flute Concerto 28; Wolfgang Amadeus Mozart, Concert for Flute, Harp, and Orchestra Concerto KV 299; Ludwig van Beethoven, Symphony nr. 3 Heroic. The George Enescu Philharmonic Orchestra. Conductor: Brian Wright

Photo: Laurentiu Obae

ISSN No. 1453 - 729X

is working on a piece about applications developed for mobile phones. Specialists estimate that by 2013 the number of smartphones and tablets will reach 3 billion worldwide, which means a very large market will be created. And Romania is often quick to pick up on international IT trends.

George Enescu Philharmonic April 27 19:00 Piano recital with Cristian Petrescu

They modestly call themselves a steakhouse, but it is much, much more than that. If you enter it from the front end of the building, you will find yourself in a shop which sells all of the chophouse’s products, ‘over the counter’ at retail prices. This includes not only their extensive range of meat products, but an array of up to 20 Italian cheeses and salamis. Add to that a rich list of French After five years of making mistakes along and Italian fine wines, and you have a with constant changes of management, ‘deli where you can dine’. chefs and directors, it appears that Heritage has finally got it right! This month Taverna La Zavat they brought the mountain to Mohammed Cuisine: Greek by importing a Michelin-starred chef. The Address: Popa Nan 16 menu is fixed (rather than a long, tedious, Reservations: 021 252 2956 rambling a la carte which so many www.taverna-lazavat.ro restaurants choose here) with three vari- The second best fish restaurant in town. ations: ‘Classic’, ‘Evolution’, and ‘Vege- It is relatively cheap and has a compretarian’. And in a catalogue of surprises hensive range of fish on its menu. The location is a bit of a dump, though this you will see that for the first time, Heritage is affordable. Gone are the crazy keeps the prices low. Go now and test prices of the past, and as proof there is the chef by asking him to go “off piste” the entry level of one main course at EUR from his menu and alter it for you. I bet he 59, including five luxurious Tapas dishes will do so. FOUNDING EDITOR Bill Avery EDITOR-IN-CHIEF Simona Fodor SENIOR JOURNALISTS Otilia Haraga, Dana Verdes JOURNALISTS Simona Bazavan, Corina Dumitrescu COPY EDITOR Debbie Stowe COLLABORATORS Anda Sebesi, Michael Barclay ART DIRECTOR Alexandru Oriean PHOTOGRAPHER Laurentiu Obae LAYOUT Beatrice Gheorghiu

Otilia Haraga Senior Journalist Bucharest Opera House April 28 19:00 Amadeus

May 8 19:00 Maria Callas homage

Photo: Laurentiu Obae

Heritage Cuisine: Fusion Address: Polona 19 Reservations: 021 210 8850 www.heritage-restaurant.eu

WHAT WE ARE WORKING ON

CULTURAL EVENTS CALENDAR

PUBLISHER Anca Ionita EXECUTIVE DIRECTOR George Moise SALES & EVENTS DIRECTOR Oana Molodoi MARKETING MANAGER Adina Milea SALES & EVENTS Ana-Maria Nedelcu, Claudia Munteanu RESEARCH & SUBSCRIPTION Lili Voineag PRODUCTION Dan Mitroi DISTRIBUTION Eugen Musat

FROM OUR READERS Talking point: ‘Audiobooks try to make louder noise’ Indeed, many people, and not just Romanians, say they need to feel the paper pages beneath their fingers and turn them. As an Audible fan (www.audible.com, www.audible.co.uk), my advice to Humanitas Multimedia and Curtea Veche is to publish unabridged titles and to focus on the downloadable format. I've looked at their offer, but I don't find their titles very interesting, especially because I can't tell if they are just unspecified bits of something, or entire books. The information on audiobooks on the Humanitas Multimedia website is scant. Sometimes the product details page does not mention the length of the recording, not to speak about "abridged"/"unabridged" labels. There are many Romanians abroad (and probably in smaller Romanian towns) who would love to listen to audiobooks in Romanian but don't have access to CDs in Romanian city bookshops. Plus, this would reduce the cost for the buyer because the CD is not needed anymore. Ema ADDRESS No. 10 Italiana St., 2nd floor, ap. 3 Bucharest, Romania LANDLINE Editorial: 031.040.09.32 Office: 031.040.09.31 Fax: 031.040.09.34 EMAILS Editorial: editorial@business-review.ro Sales: sales@business-review.ro Events: events@business-review.ro


Business Review No. 14, April 25, May 1  

Concert season is here Music is the food of profit for local concert promoters, who are putting together a star-studded line-up of gigs and...

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