Isabelle Pleska, Bricostore general manager, says DIY retail is likely to reach maturity in 4 or 5 years, a moment the company has anticipated through its outlet location strategy.
Bricostore, the first DIY retailer that entered the Romanian market, in 2002, plans to add at least two outlets to its network this year, and will continue to choose locations neighbouring French hypermarkets.
"We've set an expansion rate of 3-5 new outlets per annum for the Romanian market, but our outlet opening also depends on the plans of hypermarket networks we want to be a neighbour of and on real estate market prices, which are a challenge for us at this moment," states Isabelle Pleska.
Bricostore French network plans to open two new outlets this autumn, in Targoviste and Pitesti, with the average investment per outlet standing at 10 million euros, according to company data.
"We are targeting locations in retail parks that also include hypermarkets.
"This strategy is certain to provide us with a competitive advantage in the future, when competition tightens and the market reaches maturity. The implantation of our outlets in retail parks will surely guarantee us the necessary flow of people," explains Isabelle Pleska.
She estimates DIY retail in Romania could reach maturity in 4 or 5 years, a moment that may mark a strategy change in the network's development on the market.
"I cannot precisely say whether we will further expand after 2011 or whether we will focus our attention on other markets in the region. We could focus later, when competition gets rougher, on smaller cities where we could open smaller format outlets," mentions Pleska.
Bricostore currently targets large cities of the country, with more than 100,000 inhabitants.
The network is now made up of 7 store, four of which in Bucharest.
Domestically, Bricostore will hire around 350 persons this year to back the company's development.
On the long term, the company plans to open another 23 outlets, reaching over 30 outlets by 2011. Bricostore representatives last year forecast they would hit sales of 500 million euros in about four years.
The opening of the outlet in Baneasa Shopping Centre involved Bricostore's biggest investment per outlet so far, 14 million euros.
A Bricostore outlet generally carries some 35,000 items, 20% of which directly imported from Asia or Europe.
Pleska also says network expansion depends a great deal on the profitability of its stores.
Bricostore Romania in 2005 derived net income worth almost 10 million euros, amid turnover revolving around 84 million euros, according to Finance Ministry data. The company's representatives did not report 2006 figures.
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