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That suits Zoot: Czech etailer changes its approach

The Czech Republic ecommerce market is set to experience the largest growth of any European country by 2021, and native multibrand multichannel retailer Zoot is preparing to take advantage with a strategic turnaround plan.

Research from investment bank JP Morgan has predicted that the Czech Republic’s ecommerce market will grow 16% by 2021, outstripping the UK’s 9% predicted growth. Meanwhile, value retail giant Primark has plans to expand into the territory, and a store is likely to open in early 2020.

The market holds potential for UK brands eager to increase their reach. However, it can be difficult to appeal to the country’s consumers: edgier young fashion brands may struggle to appeal to the traditionally conservative Czech shopper.

Under new management following a “bloody” administration, Czech multibrand retailer Zoot is now positioned to help UK brands navigate its local market through marketing partnerships and a new multichannel approach. 

zoot

Lukas Uhl

Zoot was established in Prague in 2010 by marketers Josef Havelka and Ladislav Trpák, operating on a “try and buy” model. Customers order stock online and it was sent to one of Zoot’s store locations, where the customer could try on the item and buy it. Zoot stocks brands including Gant, Geox, Dorothy Perkins and Burton alongside a small private-label collection.

However, having amounted creditor debts of €30m (£27.8m) in 2018, the company entered administration in early April this year. 

A total of 300 of the 800 staff were let go and Zoot’s store portfolio was cut from 38 to 25, eight of which are in Slovakia.

“It was bloody and it was hard,” new CEO Lukas Uhl tells Drapers. “But [because of it] we have cut costs by 60%.”

Uhl is confident that creditors will be paid up to 40% of their claims.  

He has plans to change the business into a traditional omnichannel retailer, and has signed a new marketing partnership with Dorothy Perkins to expose the brand to the Czech market. 

He says: “Zoot has always had a network of stores, but it didn’t use those stores to do direct selling. People were visiting the stores to collect packages, but there was no attempt to sell them anything. It was negligent.”

This month, Zoot began to sell product directly through its retail stores for the first time at its new 300,000 sq ft flagship store in Prague’s largest fashion retail mall, Centrum Černý Most. The concept will be rolled out across the remaining portfolio.

“The idea is that the revenue generated by store sales will be large enough to pay for all the associated overheads,” says Uhl. ”We don’t need those stores to be profitable by themselves, we only need them not to generate a loss.”

He also plans to increase Zoot’s private-label offering, and it is relaunching with a new collection this autumn, which will mainly consist of womenswear.

“Zoot did a small amount of private label in the past, but it was less than 5% of our business,” says Uhl. “We want to grow it to 30%.”

The etailer is positioned to attract more UK brands, and can provide local knowledge to UK brand partners, allowing them to navigate the traditionally conservative retail market. 

Although Zoot is still yet to turn a profit – early Sales this summer put pressure on margins – Uhl has ambitions for it move into the black within the next two months, and is making changes that could allow it do so.

 

 

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