Fornetti has 695 pastry shops in Romania all of which franchised. It entered Romania in 2001 and in the thirteen years in business posted total revenue of 800 million lei (EUR185 million) and opened 700 shops. It went insolvent on a RON51 million debt.
The aggressive expansion of small family businesses took its toll on Fornetti’s business, which fell to RON66 million last year, half as much as it was in the boom years.
“This is the business development driver,” Csaba Toth said.
Although the company’s plans are to open new shops, the number of Fornetti shops has been dwindling in the last few years. The chain had 741 shops in December 2008 and by the time of its insolvency in December 2011, it had gone down to 732, almost 40 more than today.
Some Fornetti shops closed, while others had to battle with small pretzel shops and local pastry shops for survival, as the market is highly fragmented.
“Our future openings will be in those cities with economic growth potential and implicitly purchasing power to mach, we are looking at seasonal tourist destinations and one of the main targets is shopping centers,” Fornetti’s chief executive said.
The company has been opening stores in large cities and Bucharest, as well as in areas with less than 20,000 people in the last few years.
“We even have Fornetti shops in rural towns,” Csaba Toth says. The advantage of the rural areas is that competition is low.
Fornetti posted RON66 million revenue last year and expects growth of 7% in lei in 2013.
Right after entering the market the company opened both shops of its own and franchised shops and invested several million euros in building three production lines at its plant near Timisoara (western Romania). In 2011 it filed for insolvency because of the pressure of the debt taken on to develop. (EUR1=RON4.3249)
(English version by Loredana Fratila-Cristescu)