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Tsvetnoy: Russia’s New Department Store Concept

Central to the retailer’s first floor is the beauty section developed by Rive Gauche, the country's largest retail chain selling perfumes and cosmetics.

Corinne Jacques

Fun plus trendiness plus entertainment equals Tsvetnoy.

This story first appeared in the May 24, 2013 issue of WWD.  Subscribe Today.

What is Tsvetnoy? It’s the latest department store sensation in Moscow, and central to the retailer’s first floor is the beauty section developed by Rive Gauche.

Corinne Jacques, vice president at Rive Gauche, spoke about “Tsvetnoy Success Story: Another Way to Sell Beauty in a Department Store,” explaining the development of Tsvetnoy and the beauty concept housed there.

She joined the firm in 2008 as vice president of commerce and marketing. Jacques was tasked with developing the business in Moscow, where Rive Gauche didn’t have any retail presence.

According to Jacques, in 1946 Moscow saw the “birth of a new department store,” with the area’s main market located in the center of the city. During the time of perestroika in the Eighties under Soviet leader Mikhail Gorbachev, the reformation of the communist party of the Soviet Union also entailed restructuring the economic system of the Soviet Union. Many of the retail channels underwent reconstruction, were closed and then much later reopened.

Tsvetnoy Central Market was opened on Dec. 10, 2010. Boris Kuzinez, founder of Rose Group, which developed Tsvetnoy, and his firm opens about 25 commercial centers every year, Jacques said.

“It’s the most revolutionary department store in Russia,” and has become recognized internationally for its uniqueness in the store concept, according to Jacques.

She described the store as “very elegant and refined,” noting that it often features art exhibitions. “Tsvetnoy is not over expensive or lower middle class. The price points are not important. [Tsvetnoy] has to be trendy and have energy,” she said.

As for the shopper profile, Jacques said, “They want to be in style, in trend.” Zeroing in on the focus of the “new” in fashion where price points are of secondary or even tertiary concern, the Rive Gauche vice president stated, “They are tired of the old-world luxury brands. There’s no Louis Vuitton here.”

The majority of the consumers, both male and female, are between ages 25 and 45. They are fashion enthusiasts and their focal point is “I want to be different,” she said.

Hot fashion brands at Tsvetnoy include Russian designer Alexander Terekhov, AllSaints, Band of Outsiders, Haider Ackermann and Zadig & Voltaire. The store occupies six floors, with the top floor housing the restaurant and terraces. The fifth floor is the food market. The fourth floor is where shoppers can find designer brands, while the third floor is where exclusive fashion brands are housed. The second floor is set up to showcase everyday fast fashion, while the entry level on the first floor is where the beauty department is based.

That’s where Rive Gauche gets to showcase its vast selection of beauty brands.

“When Tsvetnoy opened four years ago, it [took] the market concept and [built it] in a different way….The beauty concept is key in every department store,” Jacques noted, speaking of how her firm got involved in the project.

Based in Saint Petersburg, Rive Gauche is the largest retail network chain selling perfumes and cosmetics in Russia. There are more than 200 shops in the Rive Gauche network, representing 18,000 stockkeeping units, and more than 250 brands. Many of the stores include beauty salons or treatment rooms, and Tsvetnoy is no different.

At Tsvetnoy, there are three makeup corners, a skin-care section and hair salon. On Dec. 1, 2011, a niche corner was opened as an extension of the beauty department. Brands range from the traditional such as Dior and Chanel to Bobbi Brown and Giorgio Armani for makeup. Then there’s La Mer and Bliss for skin care, as well as Fresh Organic Cosmetics, and, of course, a nail bar.

According to Jacques, her firm doesn’t advertise “as a policy,” but “partners with the brands.” It gets the word out via featured events two to three times a week at the beauty department, which complements the fashion night gatherings that are hosted at Tsvetnoy. All of those weekly activities are geared towards attracting consumers to the store and providing entertainment while they shop.

About 40,000 visitors visit Tsvetnoy each week, or 2.5 million annually. The conversion rate is between 50 percent to 60 percent. Jacques said the average transaction at the store is $85, with the average at $75 for beauty purchases and $224 for fashion buys.

For Rive Gauche overall, projected statistics for 2013 beauty purchases are expected to comprise of 31.5 percent in the makeup category, 30.8 percent in skin care and 28 percent in fragrance. The balance is in miscellaneous items.

Jacques observed that Muscovites are “shopping more and they want more entertainment.” In addition, what’s different about Tsvetnoy, where beauty brands such as the value-based Maybelline coexist with the far pricier La Mer, is that shoppers range from the secretary to the actor to the wealthy oligarchy.

“Everyone can find what they want at Tsvetnoy,” she said.