We have prioritised the CEE region for our future expansion
Baltika Group, founded in 1928, is the leading fashion brand house in the Baltics. The company owns, operates and develops Ivo Nikkolo – a successful womenswear brand with 28 retail stores across the Baltics. The Group’s Head of Marketing Liivika Lapp discusses fashion in the Baltics with Fibre2Fashion.
How will you describe fashion in Baltic nations of Estonia, Latvia and Lithuania?
We, in the Baltics, are quite practical when it comes to fashion and highly dependent on the local climate. We have four very different seasons, that’s why our wardrobe here needs to be versatile, easy to mix and match. Style-wise we have a very interesting combination of Nordic and Slavic, while preferences can even vary quite significantly between the Baltic countries.
Which are the top womenswear products that sell in Baltics?
The top-performing categories of Ivo Nikkolo are outerwear, dresses and knitwear.
What is the ratio of sales in e-commerce vis-à-vis brick-and-mortar retail stores in the Baltic region?
Currently, 20 per cent of total Ivo Nikkolo sales come from e-commerce, and the remaining 80 per cent from brick-and-mortar. Our e-channel has been growing steadily since the pandemic started. We have put a lot of strategic focus on developing e-commerce and hopefully will continue to grow the channel even more in the near future.
You will be completing 100 years of existence in a few years from now. How is the feeling? And what are the learnings?
Feels imposing. Over the last 100 years, the world has changed tremendously and so has our business. In a global economy where markets, technology and customers change rapidly, we can’t think too much about our past, and need to keep our focus on the future. These 100 years have taught us that the only constant is change.
What is the meaning of ‘brand concept’? How does it differ from fashion labels/brands?
Ever since we started the process of rethinking and rebranding Ivo Nikkolo, we have been aiming for a 360-degree approach – a whole brand concept. Not only did we reinvent the product, but we also got to know and serve our changed customer, developed a whole new retail store concept, and updated our e-channels accordingly. We want Ivo Nikkolo to be a go-to brand for a contemporary woman for stylish effortless high-quality fashion with a convenient and personalised approach.
Where do you source all your materials from? Are accessories like buttons and zippers also available in Europe?
We have strategic production partners for all product groups. The producers source mostly all the materials and accessories for the products, as they have their own partners with long term relations. We provide them with a detailed Supplier Manual and Code of Conduct that have to be followed by all our partners. This also entails all the accessories sourced and used. We produce only three categories—outerwear, knitwear and winter accessories—partly in Asia. The materials for these items are sourced locally but are confirmed by the Buying/Sourcing and Technical Design departments at Baltika Group Head Office. The rest of our product groups are sourced in Europe and Turkey. The fabrics used in European productions are also produced in the same areas.
What are the three things that make Baltika Group a leading fashion design enterprise in the Baltic region?
We can’t be considered a leading fashion retailer in the region based on our market share. It’s rather unimaginable when developing only one womenswear brand. However, we have strong and unique competitive advantages. We have a long history, heritage and local presence. Our products are designed in Estonia, and they are made taking into account specifically our customers, regional preferences and seasonality.
In which countries/regions do you sell online? What are the products?
Just as brick-and-mortar, our everyday business is focused on the Baltics, but we are not excluding countries nearby as there is interest in our brand in those countries too. We see online customers from all over Europe, mostly from Finland and Germany. E-store is a great channel to test new markets and understand what kind of products are interesting and relevant for different markets and different customers.
How is the ongoing Russia-Ukraine crisis impacting your business?
Even though we are not actively running the business in Ukraine or Russia, the war surely has an impact on us. On the very first day of the war, we witnessed an immediate drop in footfall in all Baltic countries, especially in Lithuania. The drop is, of course, completely understandable as clothing and accessories are not a primary need. It took almost three weeks for the numbers to start slowly increasing again but there is an ongoing uncertainty as we are located much nearer to the active war.
In the long-term, we don’t know how the situation will impact global logistics and supply chain, which has been in crisis anyway due to COVID-19 and its aftermath.
In terms of sustainability, where does Baltika Group stand?
We in Baltika Group value environmentally friendly thinking, and with the rebranding of Ivo Nikkolo we have significantly increased the role of sustainable and recycled materials. We have invested heavily in design that lasts for a long time and provides high and durable quality. Yet changes like that don’t happen overnight. For example, in our current spring/summer collection the share of materials that are either natural or considered sustainable is 50 per cent. Natural materials in our collection are wool, cashmere, silk, cotton and linen. We will continue using sustainable materials such as organic cotton, Tencel, recycled polyester and outerwear insulating material Sorona. We avoid petroleum-based synthetic materials such as polyester that has been replaced with cellulose-based synthetic materials like viscose. In our accessories collection, we use mainly natural materials, for example, leather, wool, cotton, silk and cashmere.
What are your near-term plans for expansion of products and markets?
We have prioritised the CEE (central and eastern Europe) region for our future expansion. In terms of product, it’s still early to say as the new strategy is very young and tested unfortunately only in conditions of the pandemic.
Published on: 31/03/2022
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.
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