The founders of Domo, Lorand Szarvadi and Ferenc Hegedus, who acquired Best Western Balvanyos hotel in Covasna county last year have recently announced their involvement in an extensive housing project in northwest Bucharest. So, where are the entrepreneurs' future investments headed?
After Szarvadi and Hegedus relinquished the majority stake they held in Domo, the two businessmen now plan to concentrate on new areas of business. However, Szavardi will remain as a manager with Domo for another 2 years, which will not allow him to spend his entire time on new business ventures. So far, the two entrepreneurs are focussing their attention on both a hotel and a housing project. The two acquired Best Western Balvanyos hotel a year ago for over 2 million euros and although they initially thought the sum destined to modernise the hotel would not exceed the purchasing price, the project is now expected to cost around 5 million euros in investments. "We had not planned to invest in the hotel sector, but then this opportunity emerged. The hotel is 20 km away from my native town, Targul Secuiesc, where Domo first started, which makes it a rather sentimental investment. I see myself spending more time there in several years," says Szarvadi. For the first year, Szarvadi expects turnover worth around 1.5 million euros, from some 0.5 million euros ahead of modernisation.
Szarvadi does not rule out another investment in the Danube Delta or a hotel at the coast "should the opportunity emerge", but does not have concrete plans in this regard.
The entrepreneurs will select a partner to become a minority stakeholder in the housing project, which is planned for northwest Bucharest. So far, Domo founders have acquired the land for a price of between 20 and 30m euros. The money was raised from their own sources, whilst the sum for the project, which will unfold over a period of around 6 years, will come in the form of a loan. The project is a real challenge for Szarvadi, who is also in talks with brokers for a portfolio on the stock exchange.
In addition, the two businessmen also own Eurocolor, a distributor of construction materials. Besides real estate, hotels and the bourse, there is another field of activity Szarvadi expects to find it hard to part with, retail. Although he will not develop a business in the same field of electrical home appliances, a new entry in retail still appeals to the businessman.
Until he lays the foundation of a new business, Szarvadi plans to take Domo to 100 million euros by yearend.
Domo will further count both on small stores (which cover around 300 square metres) and on larger formats (Tehnomarket). In terms of expansion, Szarvadi is considering opening a store in the Republic of Moldova, while the 11-store network already established in Bulgaria will be taken over by Tehnomarket, with the Domo brand to be retained.
Domo
Founded by Lorand Szarvadi and Ferenc Hegedus in the mid '90s
Forecast to reach a value of 100m euros by yearend
Will further count on small stores (around 300 square metres) and on bigger formats (Tehnomarket)
Domo network also operates Domo Basic stores (500 square metres) in partnership with Kaufland
Has opened around 20 stores this year and will open between 15 and 20 stores next year
Is considering the Republic of Moldova for expansion
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