In 2014 alone, four of the leading brands started reducing their presence on the market. BauMax, Bricostore, OBI and Piritex each had their own strategy that led to the change or disappearance of the brands starting that year. The latest example is Mr. Bricolage, a brand of local company Arabesque, now in its final stages of rebranding.
“The change of name comes as a result of the change of owners, which want to make their own mark,” says Omer Susli, the former owner of DIY retail chain Praktiker. He sold it to UK’s Kingfisher last summer, the group that also bought Bricostore chain in 2014.
Praktiker, too, will undergo rebranding two years after its acquisition by Kingfisher, Omer Susli says. It will switch to a new brand in 2019, a requirement of the deal.
The interest of foreign investors on the local market indicates a high potential of the sector, which is offering a good price/quality ratio compared with other countries in the region.
Moreover, the rise in the number of mortgage loans funded by banks led to the growth of the construction sector, which generated higher sales for DIY retailers.
BauMax’s Romanian venture ended in 2014, eight years after its arrival on this market. It sold its 15 stores to France’s Leroy Merlin. The departure was due to the financial troubles its owner, the Austrian Essl family, was going through and to the worse than expected performance in Romania. After buying BauMax, Leroy Merlin only opened one store, so its Romanian network currently numbers 16 stores.
The exit of BauMax, a brand that disappeared from international markets, as well, came shortly after Germany’s OBI had closed its seven stores in Romania. Average sales per OBI store were half of the market average at the time. The group was unable to find a buyer for its Romanian operations, so it decided to close the stores and exit. The OBI stores would later house kika, Jumbo and Hornbach stores.
Also in 2014, UK’s Kingfisher bought the Bricostore chain and later rebranded the stores to Brico Depot.
Kingfisher’s acquisition of Praktiker stores last year helped it cement its second leading position on the DIY market put at about EUR2.5 billion to EUR3 billion. The two companies have 42 stores and almost EUR290 million revenue a year, which accounts for some 10% of the market, according to ZF estimates based on market data. Kingfisher is already making changes to the Praktiker network, having announced it would close the stores in Focsani, Bacau and Pitesti.
Another brand that disappeared in 2014 is Piritex, an importer and distributor of construction materials in Prahova County of Romanian businessman Petrica Usurelu. Piritex disappeared not because of a deal, but because it went bankrupt after having laid off more than 450 employees in three years.
Mr. Bricolage is the latest name to exit the stage after the owners of the brand, the Rapotan family, announced the last store still using it (on Calea Vitan in Bucharest) would be rebranded to MatHaus. The first MatHaus opened in Iasi last year and the move was part of the company’s strategy to drop the Mr Bricolage brand, which it was a franchisee of, after plans to sell the network to UK’s Kingfisher failed. It had three Mr. Bricolage stores and with the rebranding of the store on Calea Vitan, there will be none left.
All these brand changes happened while Bacau-based Dedeman of brothers Dragos and Adrian Paval was rising. The company had about 505 million lei (EUR108 million) revenue in 2006 and has since become the undisputed leader of the market with RON5.2 billion revenue in 2016. Dedeman’s revenue is as high as all the other nine DIY market actors in the top ten together.
Dedeman has about 50 stores throughout the country and is the biggest DIY retail chain by far. It is also the fourth leading DIY retail business in Central and Eastern Europe, according to a survey by a Polish company despite having not opened any stores abroad yet.
The top ten DIY businesses in Romania posted almost RON12 billion revenue in 2016, double as much as in 2006, when the top ten posted RON5.9 billion revenue. (EUR1=RON4.6620)
(English version by Loredana Fratila-Cristescu)