The Modiana Multi-Brand Store Chain Changes Ownership Again

Among all retail niches in the Croatian market, specialized stores for well-known global fashion brands are probably the least widespread. Indeed, luxury brands find the Croatian market uninteresting due to the low purchasing power of the local population and the small number of very wealthy tourists, making luxury mono-brand stores a rarity in Croatia. However, there is some demand for branded clothing, which can be satisfied by multi-brand stores.

One such multi-brand store is Modiana, which was brought to the Croatian market over twenty years ago by the Slovenian Mercator, which was its owner at the time. When Mercator built new facilities primarily for its non-specialized supermarkets, space for Modiana’s multi-brand store was always included. As long as Mercator was sold to Agrokor, this positioning of most of its stores in Croatia was a significant competitive advantage for Modiana.

Not only were its displays visible to a large number of customers coming to Mercator, but the rental price was negligible. However, things changed over time, escalating in recent years when the new owners of former Mercator facilities first raised rents and then began indexing them to inflation. The high growth in rental costs is just one of the reasons that have pushed Modiana into the zone of business loss since 2019.

In 2022, the business year’s loss was reduced to a symbolic 15 thousand euros, with expectations that 2023 will bring a return to the zone of business profit. Unfortunately, Tamara Hoić, the newly appointed director of Modiana ZG, did not respond to Lider’s questions regarding Modiana’s business in Croatia, and since Fina has not yet published individual business results for all entrepreneurs for 2023, we still do not know how the previous business year ended for Modiana. We can only assume that nothing fundamentally changed last year compared to the previous few years, and that the situation remains unchanged, as in March of this year, it changed ownership once again, for the fourth time in its history.

The previous owner, the company EN Montecristo, whose co-owners are partly from Slovenia and partly from Hong Kong, recently sold Modiana to the Italian company PG 88. All that can be learned from various registers about Modiana’s new owner is that it was registered in 2019 with a capital of ten thousand euros, that its headquarters are in Perugia, that it has no employees, and that its primary activity is real estate business.

You must admit that it does not sound like a player who could generally ensure a new leap for Modiana, especially considering the environment in which Modiana operates in Croatia.

Despite the fact that Modiana ZG appears to be on a downward trajectory, it is essentially a fairly healthy company. While there are no cash reserves left from the past period, the company is characterized by a rare occurrence among similar ones, which is that it has no credit exposure from operational business, which is a solid foundation on which more ambitious plans can be re-established. While Croatia is a small and relatively poor market, it is not so small or so poor that it could not bear a little more of both mono-brand and multi-brand stores. Of course, provided that the new owner of Modiana is interested in the development of the store.

The entire article can be read in the new printed and digital edition of Lider.