Kingfisher signed the agreement to buy Bricostore this April and closed the EUR75 million deal in May. Do-it-yourself chain Bricostore’s stores will be rebranded as Brico Depot but the British-owned company is in no rush to start the operation.
“The first step is to scan the Romanian market and to clearly identify the needs and expectations of Romanian consumers for DIY. Then, the rebranding process will start during 2014. We will analyze in depth the results obtained in the first rebranded stores, before rolling out the process further,” Kingfisher officials told ZF.
They would not say how high the budget allocated to the makeover of the Bricostore stores was nor which store would go through the process first.
Although Bricostore started an aggressive sale of certain product stocks in its stores a few weeks ago, the UK owner has not made any decisions about how to carry out the rebranding process.
“At present, we are looking at the most appropriate process to successfully rebrand our stores, and examining various options that might be envisaged (for example, temporary close or continue to operate during the works).”
The Romanian operations were included in the group’s latest financial report, which shows the sales of the 15 stores amounted to 11 million pounds sterling (EUR13 million) in June, the first month after the deal was closed. The same report says about 150 people left Bricostore in the past year.
Whereas Bricostore’s average number of employees was 1,573 in 2012, the Kingfisher report says it has merely 1,422 left and a retail area of 152,000 square meters.
Bricostore’s sales stabilized at EUR144 million in 2012 and losses increased to EUR3.2 million. It did not make any profit in June, either.
Upon the signing of the deal Kingfisher announced plans to develop a 50-strong store chain in Romania, the first new market for the company in seven years. It will not say any more about its plans for the time being, even though management said in June Kingfisher might buy a number of BauMax DIY stores in Romania, too.
Sales on the local DIY market amount to EUR1.8 billion and competition is fierce, as decline returned in the construction sector this year. Local businesses such as Dedeman, Arabesque and Ambient compete with foreign companies like Praktiker, BauMax, Hornbach, OBI and now Kingfisher. The prevailing opinion is that consolidation will follow in several years from now and three or four major players will remain.
(English version by Loredana Fratila-Cristescu)