Sales per square metre in the electrical IT retail sector down to half

The past two years’ expansion race, with investments of millions of euros in ten to twenty new stores every 12 months, has left players in the electrical IT retail players open to trouble. Thus, they saw sales per square metre drop to almost half in the first six months. After having posted lower-than-expected late 2008 sales, Altex, Domo and Flamingo started 2009 by announcing moves to adjust networks and store closures. “The area was way oversized, 250,000 square metres for three companies. It was 100,000 square metres bigger and there are still a lot of stores that need to be closed,” said Dragos Cinca, a shareholder of Flamingo, a retailer undergoing recapitalisation in the wake of 10m-euro losses in first half. In the six months during which they worked to renegotiate rents, lines of credit and contracts with suppliers, Altex, Domo and Flamingo saw sales against sales area fall below 1,000 euros/square metre.