"In the current economic context, the biggest problem we see on the market is the lack of financing for new shopping centres and retail parks. We adjusted to the market conditions and have chosen mostly rented locations over the last few years. However, with many real estate developers lacking the cash for projects at this point, I think we will be able to increase the number of locations our company owns by co-financing retail parks," Isabelle Pleska, general manager of Bricostore Romania said, adding that loans are now easier to obtain by retailers than by real estate developers.Bricostore's expansion strategy in Romania has targeted locations in retail parks from the start, and now seven of the thirteen operational stores of the chain are located in rented space.
The year 2008 was the first year when the company expanded only in rented locations in Romania, by opening five stores in retail parks outside Bucharest.
This year, however, Bricostore will get one more location of its own, a 4,000-5,000 square metre space in the retail park in Calarasi developed by the Penescu brothers, the shareholders of the Pic hypermarket network. Bricostore's investment in Calarasi can be estimated at 10 million euros.
"It is true that borrowing costs have risen, but to us, developing our own locations remains cheaper than renting them," Pleska explained.
Bricostore Romania has worked with BRD and Bancpost for its network expansion plans, the retailer has said.
Bricostore is the second leading player in the local DIY retail, after German company Praktiker.
The French retailer last year posted 20% higher sales, worth 220 million euros, after having expanded with five stores. At the end of 2008, the company operated 13 stores, as many as it has now.
Its main competitor, Praktiker, posted the same growth rate in Romania in the first nine months of 2008. It too expanded by five new locations in that interval and has yet to reveal full-year figures.
"The market will surely no longer allow DIY retailers to grow at the same rate in 2009 as over the last few years. One of the factors is the increase in the number of operational networks. I also expect concentration on the market over the coming years," Pleska said.
There are six do-it-yourself international networks on the market at the moment, four of which - BauMax, Mr. Bricolage, Hornbach and Obi, entered Romania in the last three years. Other important players on the market are Romanian networks Dedeman and Ambient, which in turn announced bold expansion plans for the coming years. There is also France-based Leroy Merlin, one of the top three DIY retail players in Europe, which is getting ready for its Romanian launch in 2011, and has signed a contract for space in a mall project in Bucharest.
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