Austria's BauMax group, with 1.5bn-euro annual turnover, will become the seventh brand to enter Bucharest's DIY market, after opening its 12th store in the capital city.
BauMax' debut will increase competition between foreign and domestic DIY networks, as spending on building materials dropped 30% last year and estimates for this year point to a 5-10% decline.
Giants such as Praktiker (Germany), Bricostore (France) and Hornbach (Germany) already have a strong presence in Bucharest, where they have opened stores since 2002; they were joined by OBI (Germany), Mr. Bricolage (France) and Dedeman (Bacau). Another brand likely to enter Bucharest's market in the following years is French group Leroy Merlin.
Nevertheless, Austria's BauMax wants to reach five stores in Bucharest in the following years and to double its domestic network in the next three years. The company will open its first Bucharest store this month, in the Sun Plaza shopping centre, and plans to launch another two units in Bucharest next year.
"Romania is poised to become one of the most competitive markets in CEE in the following years and a rising number of players will broaden their presence in the DIY sector. Despite narrowing margins, foreign companies will continue to expand, because renovations and new constructions will continue to push consumption up," says Alexander Frech, general manager of BauMax Romania.
According to Frech, southern Bucharest already has a lot of DIY stores and he believes the Berceni area will see no more similar stores being opened in the next ten years.
He feels that the interest of DIY companies will shift towards eastern and northern Bucharest, where there still are a lot of expansion opportunities.
The Austrians rule out expansion through acquisitions domestically as they have their own unique store concept.
BauMax counts on 6
