The Romanian luxury market is witnessing a surge in interest from international retailers, primarily through multi-brand stores and franchise partnerships. As incomes rise and Romanians increasingly aspire to a Western standard of living, luxury brands are recognizing the significant potential within this local market, according to a recent report by Colliers titled “Luxury Retail Brands in CEE.”
The Central and Eastern Europe (CEE) region, which includes Romania, Bulgaria, the Czech Republic, Hungary, Poland, and Slovakia, is emerging as an attractive environment for luxury brands. The report highlights that Romania’s growing economy and expanding middle class are driving demand for high-end fashion and luxury goods.
Bucharest, often dubbed “Little Paris,” has experienced rapid growth over the past two decades. In 2021, the city’s GDP per capita, adjusted for purchasing power, exceeded 170% of the EU average, ranking it tenth among European metropolitan regions. The International Monetary Fund (IMF) recognizes Romania as one of the most dynamic economies globally, underscoring Bucharest’s impressive performance.
Colliers consultants note that significant private sector investment is transforming buildings and neighborhoods throughout the capital, fostering the emergence of a robust middle class. Bucharest now has one of the highest concentrations of high-income earners in the EU, rivaling cities like Helsinki and London. This economic landscape has spurred the growth of an array of high-end restaurants and bars.
“One of the key drivers of Bucharest’s economic performance is its large community of over 100,000 IT professionals and a vibrant start-up ecosystem. This environment is cultivating a class of high-income earners and promoting globally successful companies,” stated Liana Dumitru, Director of Retail at Colliers. “We anticipate that these growth factors will persist, further enhancing the local economy. Improvements in administrative capacity could attract even more residents to the metropolitan area.”
Modern retail in Bucharest is primarily characterized by large shopping centers distributed throughout the city. These centers, notable for their size and variety of brands, serve as popular destinations for both local residents and visitors from surrounding areas. Băneasa Shopping City, in northern Bucharest, has established itself as a hub for middle- and high-income consumers, hosting numerous premium and luxury brands that often enter the Romanian market exclusively through this venue. It currently boasts the highest density of luxury brands in the capital.
Calea Victoriei and Calea Dorobanților are key areas where luxury brands have chosen to establish themselves, particularly those aiming to maintain their individuality outside of shopping centers. However, the frequent turnover of stores in these locations indicates that the market is still maturing, lacking the robust retail synergy found in the pedestrian centers of major European capitals.
The Grand Avenue shopping gallery, located on the ground floor of the 5-star JW Marriott Bucharest Grand Hotel, has also attracted luxury brands over the years. However, many prestigious names remain absent from the Romanian market, classifying it as still emerging. Most brands, including Dior, Armani, Dolce & Gabbana, and Burberry, operate through franchise partnerships or multi-brand stores, with Louis Vuitton being one of the few to have a direct presence.
The report identifies Prague as the top destination for luxury and premium brands in the CEE region, noting that high income levels and the growing desire for a Western lifestyle are pivotal factors in attracting brands to this market. The ability of cities to draw tourists and visitors also plays a significant role, as these groups represent an important customer base for luxury retailers.
“The last 10 to 15 years have been favorable for luxury retail in Central and Eastern Europe, and the next decade could be even more promising if current trends continue,” Dumitru added. “Rising incomes, relatively lower costs of basic goods and services, and rapid economic growth in the CEE-6 suggest a bright future for this market.”
Silviu Pop, Director of CEE & Romania Research at Colliers, emphasizes the historical context, noting that Western Europe has had several decades longer to accumulate capital compared to the CEE countries, which faced development challenges due to communism until 1989. However, the CEE-6 is quickly catching up. From 2005 to 2022, the incomes of the top 1% in each CEE country doubled, with Bulgaria seeing an almost sixfold increase, compared to only 55% to 67% growth in Western nations like Spain, France, Germany, and the Netherlands.
The Colliers report analyzes 179 brands in the region, categorizing them into ultimate and aspirational luxury, affordable luxury, and premium brands. The Czech market has the largest share of these brands, with a robust retail infrastructure, particularly in Prague. In Romania, exclusive brands typically enter the market through multi-brand stores, while in the Czech Republic, many are represented by their own outlets. Poland and Hungary are also identified as developing markets with strong growth potential, with many brands initially entering through multi-brand stores and franchises but increasingly looking to establish their own direct presence.
