The general manager of Praktiker, the home improvement store network, raised its expansion target for the Romanian market, now that the network could to reach at least 14 stores by the end of this year.
"We originally wanted to attain a level of 15 stores on medium term. This level will be almost reached at yearend, so that our current target is 20 stores," says Guenter Vosskaemper, manager of Praktiker''s Romanian operations.
Since it entered the Romanian market in 2002, the German group has opened three stores a year, and last year was the most prolific in its sector, with four stores opened.
"We will keep up the same pace in 2006, with medium-sized cities as our main targets," adds Vosskaemper.
The average investment per one Praktiker store amounts to 7 million euros, taking total investments of all the 11 DIY stores the company owns in Romania to 75 million euros, in line with its estimations.
Unlike its main rival on the domestic market, Bricostore, the German group chose to open its stores in rented spaces, and not in locations it owns, which has given it more dynamism, says the Praktiker representative.
"We will follow the same strategy as regards future openings. At least, this is our strategy at the moment," adds Vosskaemper.
As a matter of fact, the German group, coping with financial difficulties, at the end of last year decided to sell the 53 stores it owned in Germany (35 stores), Greece (eight locations) and Hungary (ten units) and even its headquarters.
The value was close to half a billion euros, but Praktiker stores were not closed in the wake of the deal. These will continue to operate, say Praktiker representatives, but the cash flow generated by the sale of properties will allow the Germans to focus development on high-potential areas, such as Romania or Bulgaria.
Praktiker opened its first store on the Romanian market in 2002, close to Metro Cash & Carry in Voluntari. Since then, the home improvement store unit of Metro, the German giant, has opened three stores a year, except last year, when it opened four stores.
The pace at which stores are opened exceeds that of the Germans'' main competitor on the domestic market, the French-owned Bresson group, which announced a rate of expansion of two stores per annum.
Bricostore owns three stores located in Bucharest, and starting last year the network has also been expanded outside the capital city, in Brasov and Ploiesti.
Bricostore has so far eyed locations situated close to some hypermarkets, while Praktiker has also opted for shopping centres that did not include hypermarkets.
Praktiker also has domestic rivals, such as Dedeman Bacau, Ambient Sibiu or Tiger Amira Oradea.
Praktiker Romania
* Initially intended to reach a level of 15 DIY stores in Romania on the medium term
* Upwardly revised its target to 20 stores
* Entered the Romanian market in the autumn of 2002
* Has opened three stores a year and four stores last year
* Mainly eyes medium-size cities
* Total investments in its 11 stores worth 75 million euros
* Has opted to open its stores in rented locations, which rendered it more dynamic
ionut.bonoiu@zf.ro
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