“Most of the locations where you could find a price that would allow you to build a DIY store have been taken by the residential developers,” says Cristian Petrescu, development director of Leroy Merlin in Romania.
The locations Leroy Merlin is interested in Bucharest include the Bucur Obor, Colentina, Teodor Pallady and Baneasa areas and the retailer thinks the city could easily accommodate at least three more stores.
The investment in a turnkey store might amount to EUR17 million to EUR18 million.
“We want to know how much the turnkey project costs, we are not buying the land separately.”
Leroy Merlin has three stores in Bucharest (in Sun Plaza, Colosseum and Soseaua Alexandriei) and one store in Craiova, Ploiesti and Brasov each. The stores in Sun Plaza and Brasov are rebranded bauMax-es.
The retailer will reopen three more former bauMax stores by the end of the year, two of which in Cluj and one in Sibiu. The next on the list of rebranding are those in Constanta, Timisoara, Suceava, Bacau and Targu Mures, Petrescu says, adding the whole rebranding process should be completed in 2016.
“I think revenue will exceed EUR300 million by the end of next year, once we have completed the rebranding of our stores.”
He did not say how high Leroy Merlin’s or bauMax’s sales were in 2015 or provide any 2015 estimates, merely saying figures are not relevant since not all the stores were operational the entire year.
Leroy Merlin Romania and Leroy Merlin Bricolaj posted 181 million lei (EUR41 million) revenue in 2013, while bauMax Romania’s stood at RON517 million, according to the latest data available on the Finance Ministry website.
Out of the 15 stores it took over from bauMax, Leroy Merlin closed the store in Chitila for good and put the place up for rent; another store in Pitesti is to close, as well, by yearend, with the company considering a potential sale thereof.
“We reviewed each location and said: this we keep, this we do not,” Petrescu explained.
How high is the investment in rebranding? The cost varies with the age of the store and the plans of the local management between EUR1 million to EUR2 million. (EUR1=RON4.4229)
(English version by Loredana Fratila-Cristescu)