Mobexpert Group, the largest Romanian furniture retailer, has delayed investments in a furniture hypermarket in Sofia because of the unexpected increase in land prices in the Bulgarian capital.
Thus, the first Mobexpert store outside Romania will be opened in Belgrade, the Serbian capital, Mobexpert chairman Dan Viorel Sucu explained.
“Land prices have risen from 70 euros per square metre to 180 euros, and we have therefore postponed the project in Sofia. Instead, we will open an office furniture store in Belgrade. The store is likely to be inaugurated by the end of this year,” he said.
The Bulgarian land market has been heating up lately owing to the increasing interest of foreign investors, encouraged by the macroeconomic stability of this country, but also due to Bulgaria’s successful negotiations with the European Union. In the opinion of the EU, Bulgaria is a functional market economy, having concluded all integration negotiation chapters.
Mobexpert’s strategy, which was announced last year, was to expand the furniture hypermarket concept throughout the Balkans region. The company planned to start by opening a hypermarket in Sofia and subsequently enter the Serbian and Ukrainian markets.
Meanwhile, Mobexpert is carrying out a campaign to update the models of furniture produced in its plants, replacing its classical designs with more modern ones.
“Demand for modern design furniture is rising, both on foreign markets and in Romania, so we’ve changed product ranges and taken over the latest tendencies that can be seen in this domain in the West – minimalist and European design, with Asian influences; vivid colours; textile and leather upholstery; furniture made in bleached oak or very dark brown shades. Over 1,300 new products have been introduced this year in Mobexpert stores,” Sucu explained.
Another reason why Mobexpert has decided to renew its furniture models is the possibility that major foreign furniture retailers might enter the Romanian market, having been previously prevented from making this move because of the low purchasing power that would not have justified investments.
“We are already preparing for the penetration of the Ikea and Kika groups on the Romanian market, since the two groups are already present in Hungary. I think Ikea will enter the Romanian market around 2006, and Kika around 2007 or 2008. We will develop new customer loyalty programmes so as not to lose customers when we are facing foreign competition,” the furniture group chairman also stated.
Financial results obtained by the group’s retail unit in the first half of this year are on the rise, but still below the target set at the beginning of the year.