Dedeman, established and owned by brothers Adrian and Dragos Paval from Bacau, posted 2.68 billion lei (EUR601 million) revenue last year, an increase of 11% in lei on 2012, consolidating its position as the largest Romanian-held DIY retailer and leader of the DIY and construction materials retail market.
The revenue growth did not come from a rebound of the construction sector, though, which has not overcome the crisis, with only 40,000 homes built last year, but from expansion investments that took the network to 36 stores by the end of last year. A new store opened in Sibiu in February.
In all, the company invested EUR70 million in opening six new stores employing about 1,000 people last year, so Dedeman now has 6,700 employees, which makes it one of the biggest employers in the economy.
“Expansion was the only reason for the increase in revenue last year. With the increase in retail area, the number of customers increased, too,” Dragos Paval, chairman and chief executive officer of Dedeman told ZF.
“We want to grow by 8% this year, as budgeted for last year, on the back of expansion again and because the stores opened in 2013 will reach maturity.”
While Dedeman continues to consolidate its position, Praktiker and Bricostore, its main rivals in the past decade changed owners, while two other competitors, BauMax and OBI, plan to leave Romania.
“I think customers prefer us because we are Romanians,” Paval says. He plans to take the Dedeman network to 50 stores in the coming years.
Unlike most DIY retailers, Dedeman chose to stay away from retail parks developed by real estate investors and buy land and build its own stores instead, covering most important cities throughout the country. Expansion in Bucharest was somewhat slower, as the company has only two stores there, but that was not because of the land price but because of the uncertainty over the ownership of some plots.
As average sales per store stand at almost EUR19 million, Dedeman could reach EUR1 billion sales in three or four years, something no Romanian private company can boast at the moment. (EUR1=RON4.4629)
(English version by Loredana Fratila-Cristescu)