This choice was made in order to make a difference in a city like Bucharest, where there are already 17 “construction hypermarkets.” Inside the store, things look ready for the opening scheduled for September 15.
“This will be the largest Leroy Merlin store worldwide, out of a chain of 303 stores. We are looking to have all styles of home furbishing and construction products. As far as furniture is concerned, we will have products only for kitchen and bathroom, halls, but not bedroom items or couches,” says Philippe Hauville, general manager of Leroy Merlin on the Romanian market.
The management is made up mainly of French people – the chief financial officer, store manager, architect – eight people altogether, while the managing positions filled by Romanians are business development manager – Cristi Petrescu (formerly of Praktiker), and HR manager Adina Burchioiu (formerly of Dacia-Renault). Store employees will, however, be mostly Romanians.
The investment in the store has amounted to around EUR6 million, which includes setting up the space and the shelves, as well as the stock of merchandise and wages. On top of this comes a EUR26 million guarantee for the payment of rent over the duration of the 13-year contract, i.e. EUR2 million per year.
What sales will the store have in order to cover all costs? “The turnover doesn’t matter. We have visited 500 households and asked people what they would like to find in the store, in order to adjust the space to local needs. If clients are happy, our turnover will reflect that.”
The Leroy Merlin store in Chitila, with an overall area of 17,000 square meters, and a sales area of 15,000 square meters, will be among the largest of its kind in Bucharest, after the Hornbach stores, which post average sales of EUR23 million per year. Proportionally, Leroy Merlin could post sales of EUR18 to EUR20 million per year, but the company representative will not make an estimate.
“I believe the home improvement market will be restructured in five year’s time. For us it is the first time we enter such a crowded market. We have good competitors, with expertise, but I believe the probability of some of the stores closing down is high. We have the benefit of coming after the crisis and are better adjusted to the current realities,” says Hauville.
(English version by Daniela Stoican; Editing by Radu Bostan)