Germany’s Praktiker, the undisputed leader of the local DIY market in the 2003-2009 period, was forced to restructure in the last three years, letting more than 500 employees go, while its sales plunged from EUR300 million in 2008 to about EUR150 million last year.
The company had about 100 employees per store in Romania, but their number went down to 74 at the end of last year, according to ZF’s calculations, which take into account the information about the number of employees provided by Praktiker for the entire company, the support staff included. Praktiker officials say the company had about 2,000 employees at the end of 2011, which is an optimal number for the smooth running of its operations. They did not provide any information about the 2011 sales figures in Romania.
According to first the nine-month report filed in 2011, Praktiker posted EUR116.1 million sales, down 24.4%. If the trend maintained in the fourth quarter, then its sales should have reached about EUR150 million in Romania.
The officials of Praktiker say this is due to the “overall trend of the DIY market in Romania” caused by both the current economy and the increase in the number of competitors on this market.
Competition has indeed become fierce over the last three or four years, with the arrival of names like BauMax, OBI and Hornbach, as well as because of the fast-paced expansion of Bacau-based Dedeman, which is the new leader of the market.
Back in 2002, Praktiker and Bricostore were the first foreign networks to enter Romania’s DIY market, which has since reached some EUR1 billion in sales. Ten years later, when all the competitors say that the market is too crowded and some consolidation is needed, Praktiker is not considering an exit and intends to continue the development process, which depends on the trend of the Romanian economy though, its officials say.
Praktiker only opened two stores in Romania in Focsani and Botosani (east and north of the country) from 2009 through 2011, and closed stores in Germany and Turkey. Although it does not plan to close any store for the time being, Praktiker is also not considering resuming expansion, either, according to its officials.
(English version by Loredana Frățilă-Cristescu)