IKEA propels Popoviciu to top place in furniture retail
Businessman Puiu Popoviciu, one of the lowest-profile local entrepreneurs, has become the leading player in furniture retail, after having posted 104.7 million-euro sales at his IKEA store in Baneasa, a ZF survey shows.
Retail-wise, IKEA therefore left Mobexpert behind, as the latter's business on the segment is lower than 100 million euros. Mobexpert, controlled by businessman Dan Sucu posted about 170 million euros in turnover last year, approximately half of which from the retail segment.
Adding retail and production sales, Mobexpert remains the biggest player on the overall furniture market, though, according to ZF data.
This is the first change of leader in furniture retail, after many years when Mobexpert was number one. How did IKEA manage to reverse a hierarchy dominated so far by local players? The Swedish company with annual revenues in excess of 20 billion euros entered the local market at a time when the industry was booming, driven by the high number of residential projects being finalised and by the rising purchasing power.
"The business model IKEA applies everywhere in the world played a decisive part in getting these results on the local market. When the Swedish company entered Romania, there was no big retailer other than Mobexpert," said Iulian Padurariu, partner of branding advisory firm Trout & Partners.
IKEA said at the time of its entrance that it had waited for the market to mature first before taking the step. It does not have a direct presence in Romania, though, as the Swedes accepted the franchising application from businessman Puiu Popoviciu. Besides this application, it has received hundreds more in the course of time.
IKEA's initial sales target for the local market was already exceeded in the first six months when it had achieved the 40 million-euro budget set for the entire year. The store in Baneasa also provided surprises in terms of profit, given that its net income in the nine months in business in 2007 stood at 4.6 million euros.
The IKEA store in Baneasa is the second-largest on the domestic market after the kika store opened last December. The situation might change in the future, considering IKEA representatives announced they were contemplating an expansion of the existing store by 2,000 square metres.
The second player in terms of retail revenues is Mobexpert, with 32 stores (hypermarkets and smaller stores) The biggest store in the network was opened in Baneasa in 2006 and takes up 15,000 square metres of the 23,000 square metres of the gallery.
The eight hypermarkets opened on the local market exceed 80,000 square metres. According to Finance Ministry data, Mobexpert's stores in Baneasa and Pipera posted 55.2 million RON (16.6 million euros) turnover and 3.4 million RON (1 million-euro) net profit and 116 million RON (34.7 million euros) turnover and 13 million RON (3.9 million euros) net profit in 2007.
Number three in terms of revenues derived from retail, according to ZF's survey, is Elvila, a company controlled by businessman Viorel Catarama. Elvila operates 52 stores, 11 of which take up than 1,000 square metres. Its biggest store is located in Bucharest and takes up 5,200 square metres.