Romstal starts global expansion with Russia

Romstal, a Romanian distributor of sanitary ware and electrical equipment, which budgeted turnover worth approximately 429 million euros this year, up 38% on last year, will open its first two stores in Moscow in February and March, and targets an at least 100-store network in the long run.
“Our target is to open 300 stores in Russia over the next 10 years. We expect the Russian market to deliver; otherwise there is no point in going there. If we target expansion, it wouldn’t make any sense to open less than 100 stores,” Enrico Perini, CEO of the Romstal Group and majority shareholder of the Romstal group, told ZF. Romstal currently has 175 stores on six markets: Romania, Italy, Bulgaria, Serbia, the Republic of Moldova and Ukraine.
According to company estimates, sales on the Russian market are expected to reach 6 million euros this year, 9 million euros by 2009, and 19 million euros by 2010.
Perini (Italian-born Romanian citizen), who set up Romstal in 1994, explained that the first 2-3 years would be decisive for expansion in the Russian region. The main reasons for entering this market are the high number of consumers and the accelerated increase of the Russian constructions market, as well as the fact that the market is still not mature.
“Europe is our region, and ultimately the world. However, we cannot think in those terms right now, because we are in a much smaller league. If we want to become a big company, we need to increase our size by at least 10 times. We need to start with a country in order to do that, and that country is Russia,” explained Perini, who targets a turnover in excess of 1 billion euros at group level, by 2010.
According to current estimates, the Romstal group will post business worth 1.1 billion euros by 2010.
Last autumn, Romstal bought the entire 10-store network of Doming, a Serbian-based distributor of electrical and sanitary ware equipment, which holds 20-25% of the local market.