Disegni Getting Ready for Fresh Start

ST. PETERSBURG -- As the battle involving the Disegni clothing chain winds up, general director Harald Jonassen is getting back down to business.

The Disegni warehouse, stores and offices that were temporarily closed during the dispute have reopened, and new spring clothing is about to go on sale.

"The company went through a very difficult period," Jonassen said by telephone from France last Wednesday. "But the customers, I believe, are not concerned with all these legal problems. They are only concerned with the fashion, the product and the clothes."

Jonassen set up the Disegni company in December 2000. Two months later, German investment company Quadriga Capital Russia, which was managing two European Bank for Reconstruction and Development funds in St. Petersburg, gave Disegni the first tranche of a $1.8 million investment. The EBRD, in return, received 48 percent of Disegni stock.

Previously, Jonassen -- a U.S. citizen who was born in Norway -- was part owner of another clothing company, Eldorado Group, which had sold the Disegni label under a contract with the American Disegni International firm. Eldorado was founded together with co-owner Ruben Kalashyan, who initiated a criminal case against Jonassen, accusing him of illegal management of the Eldorado company and assets withdrawal.

Last July, police investigators closed down and then conducted four raids at the main office of the Disegni chain. Although the criminal case over Eldorado is still in court, the arrest of Disegni assets has been revoked following appeals by Jonassen's lawyers. Jonassen can now resume Disegni's operations, while Kalashyan continues to run Eldorado.

Disegni had been unable to ship and merchandise its production for half a year, but now Jonassen is looking to make a fresh start at the chain's four outlets in St. Petersburg and others in Moscow, Rostov-on-Don, Nizhny Novgorod and 19 other Russian cities.

"The first new shipment for spring starts next week, and I think we will prove to our customers that this was only a setback, and we'll come back stronger than ever," Jonassen said last week.

Jonassen said the business outlook is good, given the size of Russia's population, and he sees potential in all categories of the market.

"Every six months, every year, there are more people who start to make a little more money and need to dress well," he said. "I think the competition is not very strong in Russia yet ... at the moment, it's fairly easy to do our work."

In order to succeed, however, a company has to specialize in a relatively narrow segment, he said.

"One of the problems I've noticed in Russia is that the fashion industry is not visibly established," he said. "Many people just jump in and try to do something for everybody. That doesn't work, you have to focus, and the more narrowly you can concentrate, the better."

Disegni targets career women with clothing that aims to bridge the gap between expensive designer-label fashions and average-priced, mass-market gear. The targeted customers are aged 25 and older, mostly well-educated career women in their early 30s who are looking for classic, well-made and correctly proportioned clothing, but who also need clothing that is fashionable and fun.

"There are a lot of such categories, and there's lot of potential. It's still a wide-open market," Jonassen said.