OBI, the Germany-based DIY store network owned by Tengelmann group, will open its first two stores on the Romanian market, in Oradea and Bucharest, this year. According to Gunter Grieb, chief operating officer of OBI Romania, the company will hire 400 people for the two stores.
OBI previously announced it would invest around 4m euros to open one store (a sum that includes equipment and fitting-out) and exclusively targets retail space through partnerships with real estate developers.
In Oradea, the store will be located near Real hypermarket, while the German network's first location in Bucharest will be on a plot of land in the Berceni district, between two stores owned by Metro group - Metro Cash & Carry and Real.
OBI plans to develop a network of around 13 stores by late 2009, which includes one in Bucharest, through investments worth around 50m euros. The sum does not include rent costs for locations. The company's stores will have areas that range between 8,000 and 12,000 square metres.
Domestically, OBI will compete with strong European players, Praktiker, Hornbach, BauMax, Bricostore and Mr. Bricolage, as well as with Romanian-held DIY networks, such as Ambient or Dedeman. The leader is Germany's Praktiker, with sales worth above 250m euros in 2007, when it operated 20 stores, followed by French company Bricostore, with 9 stores. The two networks entered the market in 2002.
In addition, southern Bucharest has already been targeted by three of OBI's competitors, Hornbach, Praktiker and Mr. Bricolage.
Once Sun Plaza shopping centre in Berceni opens, BauMax network will also launch its first store in Bucharest, in the south of the capital.
Domestically, the market of construction materials distribution, which includes DIY retail, was estimated at between 2 and 2.5bn euros in 2006, according to the information published by Praktiker group.
Overall, OBI owns 500 stores across 10 European markets, with more than half located in Germany. In Romania, the company's medium-term plans targets the expansion of the DIY network to 25-30 stores, which would push the total value of investments in Romania to approximately 80m euros.
The company does not rule out the possibility of buying land to build the stores, but anticipates that land prices will drop in the long run.
This year, the retailer will also enter the Ukrainian and Slovakian markets. According to company data, OBI is currently the world's fourth biggest DIY retailer, with 5.8bn-euro sales in the fiscal year ended in late April 2007, with over 38,000 employees in total.
Tengelmann also owns Plus discount store network domestically, with sales worth 126.5m euros in the last fiscal year.
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