Lorand Szarvadi, the founder of the electrical and IT retailerDomo, who acquired the ElectroWorld network in Hungary in anapproximately 5 million-euro deal wants to build a company therethat could compete with Media Markt, the rival network held byMetro group, on equal footing.
Szarvadi made this acquisition because the Hungarian market onlywitnessed up to 10% decline in this sector, the same as in WesternEurope, compared with the market in Romania where home appliancepurchases fell 36% in the first half.
"It was self-funded. It was not a large sum, it was a good deal.I own 60% in the company and the Hungarian partner takes care ofthe management. We are trying to compete with Media Markt there,the only company with a well-oiled structure," Szarvadi said.
He took over ElectroWorld with the money he got from the sale of75% in Domo to Equest investment fund for 75 million euros.
ElectroWorld Hungary comprises nine stores, with a 4,000 squaremetre retail area, and its market share stands at 9-10%, Szarvadisays. Media Markt is the leading electrical retailer, with 22stores and 26% market share.
"I want to put the experience I've gained to use in Hungary. Itis a more developed country because Hungarians are still buying,they did not have the retail slump we did and the solution to thismarket is a company with an efficient structure," Szarvadisaid.
For 5 million euros he took over about 10% of the market, acompany with 8 million euros in working capital and annual turnoverof about 100 million euros before the onset of the financialcrisis. "We want to start making profit in Hungary in 2010,"Szarvadi said. He added that the ElectroWorld chain would increaseby three stores by the end of the year.
Lorand Szarvadi, 42, is now nearing the end of his term at thehelm of TehnomarketDomo (TMD) group on the local market. He triedhis hand at real estate, where he planned to develop a residentialproject on a 100-hectare plot, but postponed the investment andwent back to retail. His other project besides Hungary'sElectroWorld is Toyplex, a toy store chain he created, which heintends to turn into a Romanian Toys R Us.
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