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Interview: Romanian Furniture Maker Mobexpert Plans Expansion Despite Crisis
by Tsvetelina Gavrilova (SeeNews)
Mobexpert Group (www.mobexpert.ro) was set up in 1993 and now employs some 3,000. It comprises eight furniture factories, six import and three service divisions. Mobexpert has 34 stores in Romania, including 8 hypermarkets. The company opened its first hypermarket abroad in the Bulgarian capital Sofia in 2007. It also has an office furniture store in Sofia and another one in Serbia’s capital Belgrade. A: In the first three months of 2009, crisis in the last quarter of 2008. The office market situation led to a decrease of some furniture segment was especially affected as 5.0% in the sales in lei, compared to the big projects for office buildings were put off same period of last year. In euro, the or even cancelled. accentuated depreciation of the national Q: Do you have plans for reorganisations in currency determined a fall in sales of more order to combat the adverse effects than 20%. In the segments of of the crisis? home furniture and decorative Income squeeze A: Mobexpert has no plans products sales fell by 3.0%, to close down hyper-stores changes while in office furniture or factories. On the contrary, consumers’ segment the decrease was the company will continue about 10%. The figures attitude to to invest in expanding include sales at all stores and its hyper-store chain in spending on hyper-stores of the group in durable goods Romania. For this year we the region. plan 3 new hyper-stores in The economic conditions have which we will invest some created a general pessimism on the market 6.0 million euro ($8.4 million). The pace that is not favourable for the furniture of openings will depend on the finalisation industry, which is usually associated with of the commercial centres where they will hope for a better future. Therefore, we be integrated. cannot set annual targets for 2009, at Mobexpert’s strategy in the context of the the moment we are setting only quarterly economic crisis is focused on keeping the targets. Company estimates for the second current level of prices in lei. In order to quarter of 2009 point at a sales decrease of do that, in January the company started between 8%-10%, having in mind that no building a new logistics centre of 24,000 improvement of the economic environment square metres in Bucharest. The 10 million is expected in the shorter term, neither a euro investment in the centre will optimise decrease in lending costs that could lead to the acquisition and delivery processes, a recovery in consumption. which will help keep the products’ selling Q: What turnover did Mobexpert record in prices unchanged. 2008? How did it change, compared to 2007? A: Mobexpert Group’s turnover remained almost flat at 169 million euro last year, compared to 168 million euro in 2007. The figure includes all of the group’s units - 10 retail companies, eight production units, six import companies and three logistics units. The company started to feel the impact of the
Dan Sucu, President Mobexpert Group
Q: How would you describe Romania’s furniture market at the moment? To what extent has it been affected by the global economic crisis? A: The effects of the global financial crisis can be noticed in the furniture segment. Putting a brake on lending had direct impact on the real estate market and implicitly, on the furniture market. The fall in the purchasing power led to a change in customers’ behaviour regarding the acquisition of durable goods, including furniture. People can not take out credits to buy a house and hence they put off acquiring furniture. Those who are still buying are much more cautious, looking for a better price-to-quality ratio. On the one hand, the financial crisis is very complex, and on the other it is a new phenomenon to Romania. With regard to furniture retail, the impact of the financial crisis is visible, most of the retailers have reported a drop in sales in the first quarter but we can estimate that the impact of the crisis has not reached its peak yet. In an optimistic estimate, we will be able to talk about stabilisation of the economy no earlier than 2011 or 2012. Q: How have Mobexpert sales been changing in recent months in each of the countries where the company is present? What is your end-year forecast?
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