Expansion in Eastern Europe, a process that Austrian-based KIKA (a furniture and home d?cor retailer) began in Hungary eight years ago, will enter a new phase towards the end of this year, when the first store opens in Romania.
Apart from coveting the position as leader of the Romanian market, the company's management recently added another goal: to reach a 10% share of the furniture and home d?cor market with the three stores it expects to operate by 2010.
"We want to have a 10% market share of the furniture and home d?cor market in the cities that we'll eventually be present in," said Alexandru Creanga, country manager with KIKA Romania, in an interview with ZF.
He estimates the furniture and home d?cor market is worth 1.5-1.7 billion euros. If these estimates are accurate and KIKA reaches a 10% market share, its sales could top 150m euros within three years.
KIKA's interest in the Romanian market began a year before Romania joined the EU, while in 2007 the retailer recruited Alexandru Creanga, 37, to coordinate the Austrian group's expansion onto the Romanian market. At present, KIKA's Romanian team numbers 20, but is expected to reach over 250 when the first store opens.
This year, KIKA will enter the domestic market with a store in the West Park retail park (in Bucharest's Militari district), while another two new stores are scheduled to open in 2009.
The three stores will entail overall investments worth 50m euros, however, expansion is dependent on two factors: the figures derived by the flagship store, and the ease with which necessary permits are obtained.
KIKA's stores vary in size, but range between 12,000 and 28,000 square metres. The first store in Bucharest will cover 28,000 square metres (including warehouses), display 50,000 items, and falls within the large stores category.
"There have been franchise applications from Romania, but we decided it's better that we operate our own stores," said Creanga.
KIKA will have products that cover all price categories, and provide deliveries (for a specific charge), as well as services and advice.
"Over the years, we've not only formed partnerships with the domestic branches of Austrian firms, but also with Romanian firms that produce furniture," said Creanga.
Through its product range, the Austrian retailer will rival Mobexpert stores, rather than IKEA.
KIKA's expansion started in 2000, in Hungary, and continued in Slovakia, the Czech Republic, and Croatia, while last year the retailer opened its first outlet in Saudi Arabia, as part of a franchise system.
The domestic furniture market reached 1.1 billion euros last year, up 13% against 2006, with Mobexpert, IKEA, Elvila, Neoset and Staer as the main retailers.
Pentru alte știri, analize, articole și informații din business în timp real urmărește Ziarul Financiar pe WhatsApp Channels
