International DIY retailers want a new expansion peak in 2009

International DIY store chains operating domestically intend to finalise cumulated expansion investments worth around 250m euros in 2009, up from 170m euros in 2008.

The six international retailers, Praktiker, Bricostore, BauMax, Mr. Bricolage, Hornbach and OBI, could open between 21 and 24 stores next year, from the 16 stores opened this year, according to plans announced this month. Companies are cautious, though, and say they are ready for budget adjustments in 2009, should the market be hurt by the financial crisis in the first quarter. “The Romanian DIY sector still has a significant growth potential, but expectations regarding its performance must be adjusted for 2009, in the current economic context. Things can change from one month to another and I believe the direction the market will follow will be more clearly seen in the first quarter of 2009,” says Guenter Vosskaemper, general manager of Praktiker Romania. Praktiker, leader of the domestic market, has added four or five stores per year in the past four years and expects the pace to maintain in 2009. It now operates 25 stores. In terms of sales, Praktiker saw slower growth in Romania, by around 20% in the first nine months, below the 2007 rate of 54%. This happens amid the tougher direct competition on the market. Bricostore, ranking second, also counts on boosting efficiency as the company’s general manager, Isabelle Pleska, expects slower growth in 2009 as a result of tighter lending conditions. Pleska says she wants to shift expansion to spaces owned by the company, which can bring greater profitability. The retailer, which now has 13 stores, wants to maintain its pace of at least five locations per annum. Mr. Bricolage expects to finalise 14m-euro investments in two new locations in 2009, doubling the number of operational stores. It expects 25% sales growth in 2008 and growth below 10% for 2009. The most upbeat DIY retailer domestically is OBI, the German company held by Tengelmann group. When the first Bucharest store was opened, the company’s representatives stated they saw no threat at that moment. They specified OBI had the necessary funds, 50m euros, to develop a ten-store network in Romania. The only Austrian network on the market, BauMax, is likely to be the most dynamic DIY retailer in 2009, with five or six stores due to be opened.