The first good news came as late as 2014 and the market may post full-year growth.
A number of 2,200 companies operate in the furniture, lighting fixtures and household items retail via specialist stores, according to Trade Registry data. Almost 200 furniture retail companies have ceased operations since 2008. Moreover, the sector that posted profit in 2008 switched to losses in 2013.
“Profit in our industry is typically low. Yet companies’ policy has been to stay afloat so profit was sacrificed for consolidation of market position, the same thing we did,” said Alexandru Rizea, general manager of furniture maker Lemet.
“If the margin was not high enough, companies slipped into the red and some of them folded.”
Lemet operates furniture retail chain Lem’s. The plant posted EUR20 million revenue in 2013 and EUR0.9 million profit. Sales of Lem’s chain rose by 10% to 138 million lei (EUR31.3 million) in the first eight months of this year.
The top 50 furniture retailers generate 65% of the total business volume, ZF calculated based on Trade Registry data.
The top furniture retailer is Praktiker, even though its core business is do-it-yourself retail.
Mirela Ochiana, Praktiker’s marketing manager in Romania, says the company decided to shift focus towards a ‘Home & Deco & Garden’ store this June, making construction supplies a less important part of its business.
As for ‘genuine’ furniture retailers, the leader in this department is IKEA, which posted almost EUR82 million revenue last year.
The largest Mobexpert store (each such store is operated by a different entity of the group) ranks fourth among furniture retailers with EUR18 million revenue last year.
IKEA is one of the few international furniture retailers to have entered Romania along kika and Jysk, so most of the retailers are Romanian-owned. The largest local businesses are Mobexpert, Lemet and Casa Rusu.
While furniture retail sales halved, furniture manufacturers’ revenue increased from EUR1.92 billion in 2008 to EUR2 billion in 2013.
Lemet’s Alexandru Rizea says there are at least two factors that led to this growth.
“On the one hand, with the market slump, many companies turned to exports, where they saw tremendous growth. On the other hand, Romanian retail sold products at lower prices, either because of price-cut campaigns, sometimes aggressive, or because a product considered ‘middle range’ became cheaper than before the crisis.”
However, the furniture manufacturing industry did not escape the crisis unscathed, since only about 4,300 companies were still in business last year compared with 5,000 in 2008.
Aurica Sereny, chairperson of the Romanian Furniture Manufacturers Association (APMR) says the furniture industry focused on exports in 2008-2013, while sales on the domestic market halved.
“Companies relying mostly on export orders did better than those focusing solely on the domestic market,” she added.
Domestic consumption went up 8.6% in the first half, according to the data cited by APMR.
(English version by Loredana Fratila-Cristescu)