Mobexpert's secret expansion plans

Few Romanian brands have achieved awareness beyond Romanian borders, and some are not even known in Eastern Europe, yet the export potential and the know-how of the domestic furniture producers is well known. Mobexpert Group, the largest furniture exporter in Romania, wants to build at least five big stores in the capitals of the former Yugoslavia and Bulgaria.
Dan Viorel Sucu, company owner, is hoping to turn Mobexpert into a regional brand. “We have a development plan for the next five years, which stipulates opening two big stores a year both in Bucharest and in the capitals of the neighbouring countries. We will open a store by each of the Carrefour and Cora hypermarkets this year, and invest 11 million euros for this purpose,” Dan Viorel Sucu told Ziarul Financiar.
“We are targeting the major cities in the Balkan region, such as Sofia, Belgrade and Sarajevo, but will operate only in commercial parks that have three anchors: hypermarket, shopping gallery and do-it-yourself (bricolage) stores. We are practically considering any commercial development opportunity that has the three types of stores,” Sucu added.
The expansion policy will proceed at the same pace over the next four years, yet “no more than three” of the eight stores planned “will be built in the country”, Mobexpert’s chairman said.
According to Sucu, the investments in these centres would be similar to those in the store near Carrefour, that is about five million euros, which means Mobexpert would invest another 40 million euros in the expansion of the retail chain alone.
Why this choice of Balkan markets for Mobexpert? “Tastes are similar to those of the Romanians, incomes are similar and competition is not that fierce,” Sucu says.
“Bulgaria and the former Yugoslavia have no such stores and a commercial centre the size of IKEA is not justified” he added.
Mobexpert’s sales on these markets are low at the moment, reaching about one million euros a year. The group posted 100 million euros in consolidated turnover in 2001, while 2002 estimates targeted an about 10 percent growth.
Approximately half of the company’s sales are made on the international markets, with France as the main export destination for Mobexpert’s products, as well as Thailand and the United States. The company is also planning to increase exports to Eastern Europe, even though the sales volume in this region was low.
Sucu says it takes seven to ten years for a big store to break even, but did not care to specify what the sales figures should look like to meet this breakeven deadline.
The first domestic furniture producer to have opened a store abroad is Elvila, which dedicated a store in Kishinev last year.
Other Romanian companies to have expanded abroad are SNP Petrom that entered the Hungarian, Moldovan and former Yugoslavian markets. It also got the concession of oil blocks in Kazakhstan and is operating in India and the Persian Gulf.
At the same time, home appliance retailer Altex announced plans to open shops in the nearby countries, while Iasi-based producer Tehnoton already has a showroom in Moscow. IT equipment dealer Flamingo Computers has branches opened in Eastern Europe and Holland, while RCS & RDS Group is one of the leading players on the cable TV market in Hungary and Slovakia.