The company ‘s founder Dan Ostahie, one of the most powerful Romanian entrepreneurs, spoke about consumption, the economy and his business and about how his business has adjusted to the times in a ZF video interview, part of the “ZF 15 Years” campaign.
“I am familiar with every year and every day because as an entrepreneur you get caught in realities and you cannot really forget [important events]. 15 years ago it was worse, no way was it better.”
Dan Ostahie remembers that in ’96-’97, a bleak time in the history of the Romanian economy, then-prime minister Victor Ciorbea took a series of measures previously suggested by the IMF delegation, which led to the closure of several private enterprises.
“If you look in the Trade Registry, you can probably see that out of the total private companies registered on January 1st 1996, around 30% were gone by the end of 1999.
In 1996 Altex closed down half the 60 chain’s stores at the time and things started to budge again in 2000.
Looking back, Dan Ostahie says he doesn’t know if the decision to close down half the chain was the only right decision.
The Altex business went hand in hand with the Romanian economy. While the company closed down stores during the crisis years of the 90s, things changed during 2003-2004, when business started on an upward trend, helped by the development of consumer loans. The loans were a breath of fresh air for consumption as Romanians started to equip their homes with electronics and home appliances.
“Sales went up three-fold in 2003 against 2002.” The Romanian economy and consumption went full speed ahead until the end of 2008, when the financial crisis broke. Then Romanians became increasingly cautious with their purchases, lending dried up and the economy started to fall.
One of the most affected markets was the electronics & IT sector, which lost about half its value in crisis. One of the main reasons was the lending freeze.
Gradually the market has started to recover tentatively, by a few percent per year, but it is still far from the booming years level.
The turnover of Altex has itself recovered, exceeding EUR254 million last year, from EUR208 million in 2011. But it is still far from the booming years level, when it exceeded EUR300 million.
Growth will be slow, but there will be growth
“Fluctuations are not the same as 15 years ago. I think the Romanian economy has rather started to stabilize, but unfortunately it has stabilized at a rather low GDP level. For the next few years I expect slow growth, but there will be growth,” he predicts.
(English version by Daniela Stoican)