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Andricopoulos on Selling Fragrance in Russia

Bosco di Ciliegi Group's Konstantin Andricopoulos the has high hopes for the future of Russian beauty and luxury retail.

In Russia, short-term actions and speculative strategies will never bring success, particularly from a long-term business perspective.

So says Konstantin Andricopoulos, commercial director and vice president of strategy and development for Bosco di Ciliegi Group, which owns Articoli GUM and the Articoli-Vesna megastores — two of Moscow’s top fragrance and luxury accessories retailers. (In 2004, the company bought a controlling stake in GUM, the historic department store on Red Square.)

Under Andricopoulos’ watch, Bosco di Ciliegi has grown from 14 to 140 doors in Moscow and other regions of Russia in just 12 years.

“What is there going to be [in Russia] in 10 years, what are we to expect?” he asked. “After 2020, we have to be able to look behind, to be proud of what we did. [And] yes, we can do it.”

The Greek-born retailer who came of age in France and later came to adopt Russia, talked at great length about his newfound land. He seemed intent on winning new fans for Russia and his speech had a very light touch of goodwill that bordered on the nostalgic. The emotional high point came when he toted out a multicolored sack and started handing out trinkets, like food and vodka, from GUM, like a slavic Santa Claus. The high-powered crowd of top executives responded with glee.

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But that was after he delivered his more serious message. Namely, Russia has moved from a simple economy of raw materials into a new, technology-oriented position, noted Andricopoulos, who added that the country has built a Silicone Valley of its own outside of Moscow. The country is about one-seventh of the planet, he said, adding the country has 53 billionaires, while many others are becoming billionaires.

Noting that Russia has the lowest income tax in Europe, at 13 percent, Andricopoulos added that the corporate tax in Russia today is 20 percent. “So, private entrepreneurship is really pushed and very encouraged. Russia is a fully developed country, especially in the segment of the market which I represent today — the fashion, cosmetics and perfume industry.

“Selling perfume is important,” he said. “We love it — we have the Articoli [shop-in-shop concept].…We have been proud to have Estée Lauder as a historical partner in GUM on Red Square for many, many years.”

To reach consumers, Andricopoulos said his firm takes two approaches: “A microscope and a telescope. A microscope allows you to see details and our credo is ‘pleasure in details.’ The client must have the freedom of choice. This is our vision of luxury. The telescope is a way to see big. And this will to see big pushed us in 2002 to create a sports brand project, called Bosco Sport, [which] has been sponsoring the Russian Olympic Team for the last five Olympic Games.”

Building an environment around the client involves many aspects, especially attracting designers, Andricopoulos contended. “It’s not that easy to bring Giorgio Armani to Moscow, but we did it and we had his fashion show in GUM.”

As for future plans for the retailer, he indicated that “we’re going to make shops” in Sochi, the Black Sea resort that’s hosting the 2014 Olympic Games, of which Bosco will become general partner, according to Andricopoulos. “I have to say that the potential for development in Russia is far from being reached,” said Andricopoulos. “We’re convinced that Russia will move toward luxury.”