Brothers Ilie and Cornel Penescu, owners of the 4-hypermarket network Pic, have changed their retail expansion strategy and will invest in retail parks this year.
The Pic Group has acquired a 100,000 square-metre plot in Ploiesti, and a 120,000 square-metre plot in Calarasi, where it will build two hypermarkets, which will open later this year.
"The two retail parks will both include one Pic hypermarket with shopping galleries, as well as DIY and furniture stores. We have already held talks with retailers that want to be a part of this programme," said Cornel Penescu.
The owners of Pic Group will invest around 120 million euros this year (double the level of investments made in 2007) in two hypermarket projects, in Braila and Oradea.
"Although we will start to build the hypermarkets with our own resources, eventually 60-70% of investments will be funded via bank loans. However, we have not decided what banks to work with yet," specified Cornel Penescu.
Last year, the Penescu brothers added to the share capital of the group the hypermarkets in Craiova and Braila, which were appraised at around 42 million euros (140 million RON). All four Pic stores were built on plots held by the group.
In terms of sales, Pic is the largest retailer with Romanian shareholders on the market.
Last year, the Pic Group posted business worth 150 million euros, of which 60% (i.e. 90 million euros) came from hypermarket sales. "Starting next year, we will build our own hypermarkets and have projects developed by real estate investors. We intend to open 4-5 new stores in 2009," added Penescu.
The strategy of opening its own locations has seen Pic expand at a slower rate than its stronger competitors Carrefour, and Real Hypermarket. Last year, France-based Carrefour opened 5 hypermarkets on the local market, and Real - 6 stores, while Pic expanded by 2 stores.
Two other dynamic hypermarket networks in Romania last year were Kaufland and Auchan. Carrefour was leader of the market, in terms of sales in 2007.
Pic's owners have decided to invest in bigger retail projects, because this is the trend on the local market. "We have changed our strategy, because now, everybody is investing in retail parks, and it is no longer as profitable as it used to be to open a stand-alone store," explained Penescu.
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