“We’ve planned (since November i.e.) changes related to marketing, TV campaigns, PR and online and price cuts. Slashing prices is our strategy for 2014. We are implementing this strategy owing to improving logistics costs and the purchasing power generated by group Steinhoff,” added Lars Lund.
Austrian-held kika opened the store of western Bucharest in December 2008, ahead of the crisis onset, in the wake of investments worth EUR31 million. In 2012, according to the latest data available, kika generated over EUR10 million in revenue. The retailer positioned itself on the medium-price segment, but the company’s head last year said he had the surprise to also sell expensive products.
Last summer, Austrian group kika/Leiner (including the store of Militari) was taken over by South Africa’s Steinhoff Group from two families of Austria, a deal that was completed in November.
The South-African group has made several acquisitions in furniture retail in recent years which drove it to the second position in the ranking of the largest furniture players globally after IKEA. Steinhoff group grew on the basis of a German furniture business set up in 1965 by Bruno Steinhoff.
“We’re still working on the plan (the plan for Romania i.e.), but we are a group part of Steinhoff, just like Poco of Germany or Conforama of France. We’re building our own strategy depending on the Romanian market and clients,” said Lund.
Both kika and Steinhoff have purchased furniture from Romania for several years. In the case of kika, one of the suppliers is Cotta International from Arad (delivering sofas).
The retailer expects a two-digit sales advance this year.
“We’ve budgeted growth of above 15% against last year and the year proves to be better than we thought initially. Sofas still make the best-selling product category, followed by bedrooms, garden and kitchen furniture,” said Lars Lund.
2014 is likely to bring the first furniture sales increase in Romania, according to the main players’ estimates, after consumption has contracted since 2005. The furniture sector has been hurt by the falling purchasing power and in 2014 companies’ hopes are in fact related to a lending pickup, set to be also felt in purchases of durable goods.
Whereas domestically producers vied on a smaller market, those that shifted to exports managed to increase their revenues. In 2013, for instance, Romania’s furniture exports rose by almost 17% (after 5% in 2012, 16% in 2011 and 13% in 2010).
(English version by Catalina Apostoiu)