I will not open stores in large shopping centers because I refuse to succumb to blackmail. They are asking us for twice the price per square meter of retail space that multinational companies pay. This is unfair competition, and I do not understand why this is allowed.
Interviewed by: Dragana Radusinović
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Photo: Željko Jelenski
Rumors have been circulating for some time about the fashion brand Image Haddad and the fashion house Haddad, owned by Samir Haddad and his wife Zrinka, the chief designer in business circles, that they are on a downward trajectory after failing to position themselves in large shopping centers. The first prêt-à-porter Croatian brand, Samir Haddad admits in an interview for Lider, operates in a very competitive market, and the impression that it is not doing well, as he explains, has been formed because, in order to maintain financial stability, it has significantly reduced advertising expenditures.
• Why do you no longer have a larger selection of women’s suits this year, which were somewhat of a trademark for Image Haddad or at least were at the beginning of the company?
– That should be asked of Zrinka, who is the chief designer in the house, but I can say that suits once dictated fashion and sold best. This season, it is dresses.
• You started with fashion for mature women, and only later launched H2 for younger generations. Who is the target customer of your brand today, and do you perhaps have problems defining your target group?
– That is a very difficult question. Every company has problems with this. Since I have been in this business, which has been almost 20 years, I always answer this question; this process will never stop. Every few years we conduct market research, which shows that the largest number of our customers belongs to the age group of 25 to 40 years, which has been our target group from the beginning. These are young and fashion-conscious women who want clothing that ‘has no expiration date,’ both in design and quality. However, when you are in fashion, you are constantly struggling with how to retain old customers and attract new ones, as tastes and consumer needs are constantly changing.
• Did I notice correctly that with this year’s collection you opted to retain old customers?
– I would not say that this is our only goal. Today, people of all ages want to look younger. Target groups are increasingly merging based on interest. Although they have always wanted this, today this trend is becoming more pronounced. Women aged 45 want to wear the same fashion as women aged 25. Our H2 by Haddad line is still produced, but it is sold together with the basic Image Haddad line, as it has always been sold in our other stores.
• Given that you have not succeeded in entering large shopping centers, do you think you will survive in the market long-term if you do not enter any shopping center?
– Image Haddad is a successful company that records good results. We have an excellent position in the Croatian market; our brand is the best-selling and highest-quality prêt-à-porter in Croatia. There is no doubt about that. I will not open stores in large shopping centers because I will not succumb to blackmail. They charge us twice the price per square meter of retail space compared to what multinational companies pay. This is unfair competition, and I do not understand why this is allowed. This is not a fair way of doing business. They do this deliberately to push down the few domestic brands that exist and take positions. This is a planned and systematic action. If you are in a shopping center, it turns out that you are working only for its owner, and we will not do that; we must work for our company in which we want to invest. I cannot give all the profits to the shopping center owner. I am confident that we will remain successful in the market without them. I am convinced that the best shopping in Croatia will always be on Ilica. In Zagreb, the best shopping will always be in the city center, and Ilica will never become Stradun, where T-shirts, souvenirs, and restaurants are sold. If that happens, I will stop doing this business.
• Who should take on the task of solving the problems that domestic brands have with foreign owners of shopping centers?
– This cannot be solved by one person. The media can help, and state institutions need to get involved. Domestic producers should also work more on this, but we, in the industry, do not cooperate enough, and we are not competition to each other. I often tell my colleagues in the industry that I would be happy if we were competitors to each other because that would mean we are individually strong, but we are not. Foreign brands are our competition. And we cannot seem to understand that we should cooperate more.
• If you advocate for cooperation, why are you not a member of the Croatian Employers’ Association and part of the textile cluster that is being formed?
– We are not a member of HUP, but we are in the story about clusters. Not actively, but we are on the list as domestic producers. In the leadership of the cluster, after 19 years of our existence, a dilemma arose as to whether Haddad is a domestic producer or not, and they even told me that they would put us on the list of domestic producers! I just do not understand by what logic we would not be considered domestic producers.
• Zara recently entered Croatia in a big way and is your direct competitor. How do you cope and how will you cope with Zara?
– Zara is our competitor in one segment, but our sales in Zagreb did not drop after its arrival. After the opening of Mercatone, our sales dropped in the first three days, but that company is not a competitor to us at all. On the opening day of Avenue Mall, our sales in Zagreb did not drop, and to this day, as the season progresses, there is expected growth, but we need to wait for the results of the entire season.
• Do you expect that Zara will take customers from you in the long term?
– No. I think it will even help us to be more successful. People will have the opportunity, not only those who shop abroad but also those who shop here, to compare the price and quality of the two fashion brands. In this regard, we are better in quality than they are, and our prices are approximately the same.
• In recent years, you have talked a lot about exports, but you still generate more than 90 percent of your revenue in the domestic market. Why is it so difficult for you to enter foreign markets?
– Perhaps because we are actually a conservative company. We do not want to export at any cost; we must be able to charge for our exports. No Croatian clothing brand has succeeded in becoming international. It is very difficult to break into the world from a small country. If Croatia had 24 million instead of four million inhabitants, it would be easier for us. Mass makes a brand stronger. Everything that Image Haddad earns is reinvested back into Image Haddad, but for a stronger push into foreign markets, significant investments are needed, and we are currently not capable of that on our own.
• Is your production in Serbia profitable?
– That business is solid, but not commendable. We are only solving the problem of the lack of domestic sewing capacities. The fact remains that we pay 14 percent customs duty on the return of that goods to Croatia.
