“The furniture market hasn’t been good since 2008. The market is now on the rise and this is because of an increase in construction activity in the past two years,” Sucu told ZF in an interview.
Furniture purchases are not a priority for customers and the postponement of the purchasing decision that started in 2009 showed its negative impact until last year, he added.
Mobexpert group posted 540 million lei (EUR121 million) in revenue last year and expects it to increase to RON585 million this year. The group operates a 32-store chain and is the largest local furniture retailer. Mobexpert is an integrated business, with nine plants in Bucharest, Dej, Targu Mures and Suceava and logistics platforms in Targu Mures and Bucuresti supplying the stores.
“Things are better now as companies are capable of reviewing all the internal processes and doing them better. We are reviewing everything we’ve done so far to see how we can do things better. Nothing will stay the same.”
One such example, he says, is a lending product developed three years ago, offered at no cost for one year for purchases of at least RON10,000, which he now wants to expand to 18 months and then to 24 months. Another example is the “Limited Inventory” campaigns conducted every now and then and targeting those who bought their homes via the First Home scheme and need furniture at a lower price than Mobexpert normally sells its products. The limited inventory means the group buys small amounts of raw material from suppliers (which have only a limited supply available) at a discount, which translates into the price.
“The good thing is the ability to manufacture in Romania. For the first time I can say I get the feeling there is some understanding and support from the banking system, too, for the idea of having manufacturing in Romania. The talks with banks are held from completely different positions than in 2009. The attitude towards domestic manufacturing is clearly positive.”
He means the large banks and not the niche lenders here.
This is the first time Sucu has spoken about a change of attitude among banks, after having repeatedly criticized them during the crisis for raising costs, which left customers with less available income.
“It’s not about our growth alone. The whole climate is different. All the signals are positive.”
Retail growth helps manufacturing, as well, and the businessman says none of his plants is working at less than 60% capacity.
Under the circumstances, he is resuming expansion and plans to open at least one 10,000 square meter store next year.
Mobexpert returned to growth in 2011, after having added new products (such as outdoor items), expanded the decoration range and introduced new products in stores faster. In 2014, it decided to boost online sales, and expand the outlet in Pipera, northern Bucharest, where it sells products about to be discontinued in the other stores or brings new products that do not go with the style of the rest of the network.
Mobexpert developed partnerships with online retailers emag.ro and elefant.ro last year and in March 2015 revamped its own website. Sales via its own site rose four-fold in April, with customers choosing mainly furniture and especially outdoor furniture, Sucu said.
The outlet in Pipera, too, saw sales triple in the first four months, and Sucu says it is getting close to the sales of an average store outside Bucharest.
“I expect the sales of the outlet to go beyond EUR4 million this year.”
(English version by Loredana Fratila-Cristescu)