At the same time, its main rivals have chosen to stay put, but this strategy has not helped them preserve their market share. Now, though, Bricostore and Praktiker networks have changed their shareholding structure and are entering a new stage, trying to make up for lost ground.
Competition is due to tighten, but can Paval brothers be toppled from the leading position?
“If my rivals fare well, I will be faring well the next day,” states Omer Susli, the Turkish businessman who took over the reins of Praktiker, a 27-store network with annual sales of around EUR140 million.
However, the same Susli, who also controls a sanitary wear distribution business whose clients are the very DIY networks, admits the market has not contracted significantly in recent years, with the losses of Praktiker being indexed against the revenue of other players in the field, so that the company needs to embrace a series of changes.
“We want to retain German order and cleanliness, but add an Oriental spirit, more openness to clients. We must also specialize in home décor. At present, there is too much concentration of building materials and for the time being demand is not quite high on this segment,” Susli also said, indicating two lines he banks on for reviving sales.
The entrepreneur does not have the ambition to bring Praktiker back to the leading position it filled until 2009, but hopes to drive the company back to profit and revenue of EUR300 million, like in 2008.
To achieve this, Susli appointed Cansu Derintuna as managing director at Praktiker. Derintuna was a procurement manager at Praktiker Romania in 2002-2009 and then worked for Praktiker Turkey.
Kingfisher wants 50 stores
Britain’s Kingfisher, Europe’s biggest DIY player, also entered the domestic market with a new management team. The group in the spring of 2013 acquired the 15 Romanian stores of French Bricostore. In mid-March, the British group completed the rebranding as Brico Depot of the first two Bricostore units, located in Bucharest.
On this occasion, the French manager running the Romanian subsidiary declared his intention of turning the company into the leader of the Romanian DIY market.
“The market shows us we can reach 50 warehouses in Romania, but we do not know the timeline. We have no restrictions for possible takeovers, everything is possible. We want to move fast to become the leader of the market,” stated Patrick Papot, appointed as delegate general manager of Brico Depot Romania.
With gross income of over GBP700 million in 2012, the British group has the financial strength to grow in Romania and the DIY market now provides interesting acquisition targets.
Last autumn, Ian Cheshire, chief executive officer of Kingfisher, told Bloomberg he could buy in Romania a series of stores belonging to BauMax Austrian group, but no such move has been made, yet.
Kingfisher is moving carefully on the domestic market, considering 11 months passed between the takeover announcement and the rebranding of the two Bricostore units and the rebranding process is likely to be finished as late as the end of 2015.
What is Dedeman doing?
While Britain’s Kingfisher kept the two Bricostore units undergoing rebranding closed for two months, Romanian-owned Dedeman has come to develop a store from scratch in four months and by the end of 2015 Paval brothers’ company is likely to end its expansion domestically.
(English version by Catalina Apostoiu)