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Soleto's Negotiation with Spain Centres

Soleto, an international cosmetics retailer, had been negotiating with Spain Centres (SC), an international shopping centre specialist, to open a franchise in SC's Madrid location. Soleto's major objective was to start their franchise on the first floor, but they were only offered space on the third floor. Soleto realized the importance of being in a key Spanish capital centre and accepted the third floor space. However, Soleto contacted SC several times requesting a reduction in rent due to financial difficulties, but SC refused due to their inflexible policies around rent negotiations. Both parties have differing perceptions of the situation: Soleto sees the opportunity at SC as important for marketing and sales, while SC views

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361 views2 pages

Soleto's Negotiation with Spain Centres

Soleto, an international cosmetics retailer, had been negotiating with Spain Centres (SC), an international shopping centre specialist, to open a franchise in SC's Madrid location. Soleto's major objective was to start their franchise on the first floor, but they were only offered space on the third floor. Soleto realized the importance of being in a key Spanish capital centre and accepted the third floor space. However, Soleto contacted SC several times requesting a reduction in rent due to financial difficulties, but SC refused due to their inflexible policies around rent negotiations. Both parties have differing perceptions of the situation: Soleto sees the opportunity at SC as important for marketing and sales, while SC views

Uploaded by

MaChAnZzz OFFICIAL
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Negotiation between International cosmetics retailer Soleto and the International Shopping

Centre Specialist Spain Centres (SC)

Interest of Both parties

Soleto SC
 Major objective put forwarded by Soleto is to  Either them Soleto to pay all the remaining
commence their franchise in the first floor of rents or decided to resort to judicial remedies
Spain centre. As it negotiated quite long, but in order to force Soleto to pay the pending
received only 3rd floor of shopping centre to monthly rents
start their business. Soleto realized how crucial
it was for their strategy to be present in key  To escalate Soleto from the third floor of mall
centres of the Spanish Capital , and accepted a which is operating with a lower fixed rent. And
rd
2000 square meter space located on the 3 provide that space to another retailer.
Floor.
 Soleto contacted the Centre several times to
request help through a reduction in the current
fixed rent. The centre, known for its inflexibility
when it came to renegotiating such a key
variable, immediately refused.

Positions

Soleto SC
Retailer Soleto has been concentrating on an Capital Shopping is one of a vast net of shopping
internationalization strategy, after their big success malls belonging to the company Spain Centres. It
in the Italian market. Their vision is to start being has a very attractive location, on one of the most
recognized all over Europe in order to compete crowded streets of Madrid. In 2013, after
against giant cosmetic brands like Pantene, Olay, struggling against the Spanish economic situation,
The Body Shop, Nivea, Lancôme and Avon among the centre had a renewed confidence, since
others. Since 2008, their overall revenue has grown “demand will remain highly selective, with
around 70%, having approximately 450 stores all secondary locations struggling to attract
over Europe’s biggest cities occupational and investor interest”

Perception
Soleto SC
 Soleto has a clear knowledge about SC,  Soleto as a popular brand in the market, SC is
because they knew, getting a space in SC is one very understandable that, Soleto is a leading
of the biggest marketing as well as sales brand for cosmetics and health-care products
propulsion for their brand. (body and face) designed to serve low-to
 Soleto knew, Spain Centres, a Spanish-based medium income buyers. It belongs to the group
company, is one of the largest management LIPSIL, an Italian-based company which in 2008
companies of shopping centres in the world, started spreading their brand all over Europe.
present in more than 30 countries, owning Regarding the Spanish market, over the
around 200 shopping centres around the globe. previous2 years sales had either stagnated or
It is known for its excellent performance in declined.
terms of its retailer’s sales and flow of visitors,  So getting a space for their France in SC
as their centres are usually located near shopping mall will be a higher customer centric
stadiums and also near several offices, engagement.
characteristics which automatically guarantee
constant foot traffic. The Capital Shopping
located in Madrid is a perfect example of a
good strategic location.

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