2014 has probably been the most agitated year in the 12-year history of the local DIY market, with two major deals that involved 42 stores, an exit wherein price cuts of up to 75% unsettled prices on the market, investments of above EUR60 million in new stores and the emergence of a new brand and concept, Brico Depot, which has so far replaced eight Bricostore stores.
More specifically, the sold stores belonged to Praktiker (27 units) and BauMax (15 units), Germany’s OBI exited closing down its seven stores in Romania, while new stores were opened by Romanian-held Dedeman (four units), French Leroy Merlin (a store in Craiova) and the new owner of Praktiker, Omer Susli, who opened a store in Targu-Jiu.
At the same time, Britain’s Kingfisher put the Brico Depot name on eight of the 15 stores it bought last year from Bricostore and the rebranding process will be completed next spring.
“This year’s events prove Romania’s DIY market is too small for such a high number of active companies. Market consolidation will continue and the tight competition is set to make new victims on the road to normalization,” said Dragos Paval, president and majority stakeholder in Dedeman.
The company run by Dragos Paval is set to reach sales of above EUR650 million this year owing to stores opened in Sibiu, Deva, Targu-Jiu and Bucharest’s Colentina.
“We are satisfied with the figures registered after June 26, when Praktiker stores were taken over, but all these moves have not helped anyone as they’ve upset the market,” states Omer Susli, president and owner of Praktiker network in Romania.
Praktiker reached sales of EUR130 million last year, from over EUR300 million in 2008, but Susli says revenue has resumed growth, a reason why he started expanding the network again. Nevertheless, the number of players seems to be too big compared with the sales potential.
“I believe that in around two years there will be only three large players left on the DIY market. I believe that against Romania’s population and incomes, there still are too many players,” stated Susli.
Nevertheless, some groups still have expansion plans. Dedeman reached 40 stores this year in the wake of investments of around EUR50 million and for the next two years the company plans to reach 50 units. Praktiker’s Susli also voiced his intention to drive the network to 40 stores, while Britain’s Kingfisher recently stated the target of driving Brico Depot network in Romania to 40-50 units still stands.
On the other hand, it remains to be seen what Leroy Merlin’s next step will be after it rebrands the 15 stores bought from BauMax.
Ambient and Hornbach are also to be watched, though the two companies haven’t been too dynamic in recent years.
The structure of the market has changed significantly this year, though the construction market has declined. What will be the next move?
(English version by Catalina Apostoiu)