Bulgari Plans to Open a Hotel in Russia
In 2017 the company plans to open hotels in Shanghai, Beijing and Dubai.
One of the key brands or mansions of LVMH, the Italian jeweler Bulgari plans to open a luxury hotel of the same name in Russia, as confirmed by the Director General of the company itself, Jean-Christophe Babin. Bulgari has in this moment three hotels, in Milan, London and Bali. In 2017 the company plans to open hotels in Shanghai, Beijing and Dubai.
All mentioned resorts are managed by the operator Marriott International, which also manages the networks of the Marriott, Renaissance Hotels, and The Ritz-Carlton chains. At the same time investing strategy Bulgari in the hotel will be based on strengthening its jewelry business in Russia and it intends to expand its network of stores in 4-5 monobrand, 3 of which will open in Moscow.
Possible additional investors in the project.
Bulgari is in conversations with several potential investors partners to open the mentioned hotel in Russia. One of them could be Alexey Bogachev, main minority shareholder in «Magnit», one of the leading supermarket chains Russian, based in Krasnodar, in the south of the country.
Bogachev gained control over part of the «Victory Park» multifunctional complex in western Moscow. In early 2014, he acquired through several real estate operations several floors of skyscrapers Sky Light for about $ 80 million. Forbes magazine estimates the wealth of Bogachev in 2015 to 1,1 billion USD (Bogachev is in the top 100 richest Russians on the list, the magazine). The Russian tycoon has declined comment on possible talks with Bulgari.
Babin said the decision to develop a network of five-star hotels in the 2000s has proved successful: «The two business areas (jewelry and hotel) combine perfectly because the products consumers of Bulgari, travel, expect a high level of service they can get not only in the brand stores, but always staying in a good location with luxury service and surrounded by an environment that reflects the Bulgari spirit.» The elegant design of hotels has been made by the architectural firm Antonio Citterio & Partners.
Despite the Russian crisis.
«The Marriott hotel chain has long sought to keep Russia Bulgari hotel, but for one reason or another did not finish the project take shape. Now it seems that the hotel will go forward «– confirms a senior consultant in the real estate market. From various locations studied seems that the company will choose one of the buildings in the center of the capital, in the prestigious area of Bolshaya Nikitskaya.
«Generally, hotels have a format charming downtown, a unique place and are in buildings that represent historical value – says responsible for Russia and CIS JLL Hotels & Hospitality Tatiana Veller -. So when we talk about the opening of the Bulgari hotel in Russia, rather, not referring to the construction of a new building from the ground, but the reconstruction of a historical building in the center of the city.» According to Veller, the volume of investment depends on the building itself, the state of the historic building, coordination costs, etc. is found «It is an expensive product, the Bulgari hotel is not a typical project, because we are talking about an investment of around € 500-700 thousand per room.»
«Bulgari commitment to develop its jewelry business in Russia and the behavior of short-term sales is not the highest priority for us right now, Jean-Christophe Babin -Indicates. We are confident that in the medium term, Russia will be able to enter the five most important markets for the brand.» Bulgari CEO said that over the past two years, a weak ruble had a negative impact on the purchasing power of Russians and therefore affected their sales, but the first results in 2016 are quite encouraging in that regard.
LVMH has another line of luxury hotels called Cheval Blanc. As a matter of a fact, Bulgari hotels are not in the same location on the group’s website.This fact comfims the decentralization policy which takes LVMH for each mansion, with the purpose of this closer to the customer and adapt to the needs of them, while synergies are created to reduce administrative and management costs within the group.
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