Domo boss does not rule out a possible acquisition in the following year, but does not provide further details.
ZF around two months ago wrote electro-IT retailers Flanco and Domo, ranking second and third on the market, are in talks to create a player with revenue topping EUR250 million, outrunning the market leader. Kim Keollner would not comment on the information.
“We plan to be leader of the market in one year and this may involve an acquisition if the asking price is fair. We’re looking both at online and offline companies”.
To climb onto the top position, Domo should double its revenue and, considering the company is not betting on aggressive expansion, an acquisition is the only way to achieve this.
Domo ended 2013 with revenue of 584 million lei (EUR132 million), up around 6% on the year. For 2014, the company targets revenue of RON787.5 million, almost 35% above the 2013 level.
The network has in recent years undergone an extensive restructuring and revamping process, with small and unprofitable stores being closed down or relocated. Thus, in 2011 the network included 130 units compared to 95 at present.
“The refitted or relocated stores boast sales over 45% higher than before,” says Domo head.
He also says the company is set to reach around 100 units at yearend, a level it plans to keep stable in the following years, except for an acquisition. However, around 20 stores will be refurbished or relocated in the coming year.
“We are reshuffling our portfolio. We’re keeping the flagships of Baneasa and Cluj, but we’re generally focusing on smaller spaces,” specified the head of Domo, without offering details about areas.
He is the first foreign CEO of the company, replacing Dragos Dinu. Previously, the company was run for almost two decades by its founder Lorand Szavadi. Domo was created around two decades ago by Lorand Szavadi and in the first phase imported and distributed international brands such as Zanussi, Bosch or Electrolux. Its first store was opened in 1996, two years after set up, and now the network includes around 95 stores.
Domo is 100% held by Avarike Ltd registered in Cyprus. According to ZF data, Bulgarian billionaire Tzvetan Vassilev, considered by Forbes as the Bulgaria’s most influential businessman, is behind this entity.
“The online segment now accounts for around 8% in sales, but we’d want it to reach 20% of the business in around one year. I believe there will a fusion between the online and offline in the future”.
In the case of Domo, the 35% revenue advance of 2014 will come from both segments, believes Keollner.
Before joining Domo, the South-Korean-born executive worked for sports equipment retailer Decathlon on several markets, filling various positions. He was also a development manager for Hilton hotel of Sibiu and general manager of Germany’s beverage distributor TWG.
At the moment he arrived in Romania four years ago, he says he did not know what to expect, but discovered a country with a Latin culture and delicious food.
“From the very first month, I’ve travelled countrywide as I wanted to know clients, the market and competition. You need to know every detail in each store, you need to know clients’ shopping basket”.
Domo boss says he should spend at least 20-30% of his time doing field work, but now spends most of his time at the office as he needs to organize and restructure operations from the central headquarters.
(English version by Catalina Apostoiu)