Neutral’s official opening of its new 700sq m Gap store in the Punta Carretas shopping mall in Montevideo marks the retailer’s first domestic market project.
But company CEO Enrique Urioste told The Business at the opening ceremony that one of Uruguay’s leading duty free retailers is not stopping there: “When we made the agreement with the brand owner just one year ago we mapped out a two-stage expansion plan to roll out the brand.
“The opening of the 700sq m store in Montevideo will be followed immediately by two shops within shops at the Neutral stores in the border towns of Chuy and Aceguá. And early in the New Year, we will complete the first phase of the development plan with a 300sq m shop within our shop in Rio Branco.”
He added: “The total investment in the first phase of the development of the Gap Brand will be just under $8m, but this will be followed by additional openings during 2013. The second phase will commence next year with a 200sq m Gap store within our new border shop in Bella Union and then we will continue with another downtown store in Montevideo – this time a 750sq m store in the Montevideo Shopping Mall, one of the most important retailing locations in the city.’’
MORE GAPS IN THE MARKET
In October 2013, the company will take the GAP brand to Paraguay with a downtown store in the country’s capital, Asuncion. Urioste said: “We will open a 750sq m store at the beginning of the fourth quarter in Shopping del Sol, one of the foremost shopping malls in Paraguay. The final phase of the GAP expansion will be in 2014 when the company opens a 750sq m store in a new mall to be built in the Uruguayan border town of Rivera.”
In terms of space, Urioste said: “During the GAP expansion programme, we will open around 3,000sq m of retail space in under two years and we will have invested $15m once everything is up and running.”
Gap will provide incremental business for the company and Urioste says he and his team will continue to look for more exclusive brands in a bid to differentiate the Neutral product offer from its competitors.
He said: “Already the company has secured a deal to sell BMW motor cycle clothing and related accessories. We have just completed a test market in one of our stores and we sold every item in less than 15 days; as a result we are now rolling the concept out to the rest of our border stores.
The positive news for Neutral does not finish with GAP or BMW, as Urioste explained: “We have also just signed a deal to represent Benetton clothing in the duty free business in Uruguay and we will be rolling out a selection of men’s, women’s and children’s clothing within a short period of time.”
[Neutral’s Chuy border store will shortly be featuring Gap as well].
BORDER PLAN ON SCHEDULE
Clearly, 2012 has been a good year for Neutral and the company confirmed to The Business that the renovation plan for the company’s border stores is on schedule for successful completion.
Urioste said: “The projects we announced earlier this year are being carried out as we planned. New layouts have been completed at Aceguá and the product mix renewed. This month we have finished the renovations at Chuy and the store now has an additional 550sq m of retail space, making a total of 2500sq m.
“An additional 1,000sq m will be added at Rio Branco by March and this will allow us to redesign layouts and rework the product selection. At the same time we will be opening a new 1,500sq m store in Bella Union.”
Urioste also confirmed that the company is making plans for an additional duty free store measuring 2,500sq m in a new mall being developed in Rivera, which will be completed in 2014.
After a few slow months over the southern hemisphere winter period, sales on the border are now growing again. Urioste adds: “Revenues are once again ahead of 2011 and 2010, which is good news for everyone. The Brazilian real is stable against the dollar and consumers want to spend. At the moment we are forecasting a strong end to the year and we are forecasting very solid sales throughout the summer high season at all our border stores.”
[Top: Neutral CEO Enrique Urioste announces the launches of Gap at Neutral’s store in the Punta Carretas shopping mall in Montevideo].