With the clock ticking down to Attica Department Stores’ IPO, Ideal Holdings CEO Lambros Papakonstantinou and Attica’s management team presented the plan for the department store chain’s future earlier on Tuesday afternoon.
The five-year business plan calls for, among other things, the creation of a 2,500-square-meter “mini Attica,” an “investment” in the premium and luxury segments, a focus on mono-brands, an emphasis on Attica Beauty, as well as the creation of smaller store formats and an investment in Elliniko.
However, the head of Ideal and Attica’s management did not wish to provide guidance due to the fact that the company is on the verge of its IPO. Last year, the company’s sales reached €244 million and EBITDA €30 million.
Lambros Papakonstantinou, referring to the decision to sell a 30% stake, said that this move is dictated by market conditions and the company’s unique characteristics, rather than an intention to divest.
“The market is good, there are no comparable companies, and the company’s fundamentals are very strong,” he noted, adding that the process could not have proceeded otherwise. “Attica Department Stores has a very healthy balance sheet, very good cash flow, and financial resources, so it can finance its own growth. It made no sense to raise new capital by issuing new shares. We’re selling from our existing shares. It’s very simple,” he said.
Speaking about the future, Lambros Papakonstantinou said: “We want to grow it as much as possible and move away from the traditional department store model to pursue something else,” adding that shareholders fully support both the investment plan and management in its next steps. He stated: “We support the entire investment plan and everything associated with Attica Department Stores. We were, we are, and we will remain. We are in no hurry to leave. Quite the opposite. We like the investment and want to keep it. That is why we are here.”
What is the 5-year business plan?
Regarding the growth strategy for the next five years, the management of Attica Department Stores estimates that the premium and luxury goods market in Greece will continue to grow at a faster pace than the overall retail market, with investments over the next five years estimated at 35 million euros.
According to the company’s forecasts, the premium and luxury fashion and cosmetics market, which currently stands at approximately €1.5 billion, is expected to reach €2 billion by 2030. The total market is estimated to grow at an average annual rate of 3%, while the premium segment will grow by 6% and the luxury segment by 5% annually.
As management explained, growth in the premium segment will stem primarily from increased demand. In contrast, growth in the luxury segment is expected to come mainly from the supply side. “Today, luxury brands cannot find available spaces in Athens to expand their presence. There are fewer than 40 luxury brand boutiques operating in the Greek market, while in comparable European cities the number exceeds 200,” management noted.
“We want to fill a significant gap in the market and help Athens evolve into a luxury hub for the wider region,” management emphasized.
A key pillar of the plan is the further upgrading of the product mix in existing stores. The company intends to continue bringing in new brands with limited or no distribution in Greece, thereby strengthening its differentiation from the rest of the retail sector. At the same time, the development of new product categories, such as home design—which has already been added to City Link—will be explored.
Significant emphasis is also being placed on upgrading services. The company plans to expand beauty services, add new treatment rooms, and expand the dining areas. Following the success of the hospitality area and the café-wine bar on the fourth floor of City Link, new developments are being considered for other floors of the store, as well as the creation of more exclusive hospitality spots, such as a champagne bar.
Perhaps the most significant project in the next phase is the so-called Luxury Project at City Link. The plan involves the creation of a fully upgraded 2,700-square-meter luxury floor, where leading international brands will develop personalized corners and boutiques. The company is already in discussions with major luxury groups, such as LVMH and Kering, as well as with independent brands like Valentino. The goal is to create a luxury destination in the heart of Athens that will address the current lack of an organized presence of luxury brands in the Greek market, as the management team stated.
In addition to existing stores, the plan includes expanding the network of mono-brand boutiques, as well as the new Attica Beauty concept. The first Attica Beauty store is expected to open at The Mall Athens in November, while the plan calls for the creation of 5–6 stores over the next three years. Finally, the company is considering the creation of a new, smaller department store of approximately 2,500 sq. m., as part of a total expansion of 7,500 sq. m. of new retail space.
“Our goal is to increase our market share from approximately 11% today to 15%-16% over the next five years,” management noted, adding that 75% of the expected growth will come from existing operations and the remaining 25% from new initiatives included in the company’s strategic plan.