Praktiker Romania sees sales go down by 28.8 percent in first semester

The local subsidiary of German DIY retailer Praktiker, has seen sales go down once again in the second quarter by 28.3 percent, leading to an overall 28.8 percent decline for the first six months of 2011. The retailer’s net sales for the first semester reached EUR 68.7 million. 2010 wasn’t a better year either, sales going down by 21.8 percent.

According to the company’s financial report for the first semester, the local market will continue its downward trend at least on the short term. “Countries such as Greece and Romania were massively shaken by general economic and fiscal problems. As a result, private consumer spending – and with it demand for DIY products – diminished substantially. Moreover, there is no short-term improvement in sight,” reads the report.

Praktiker Romania has a network of 27 stores. The retailer also present in Luxembourg, Greece, Poland, Hungary, Turkey, Bulgaria, Ukraine and Albania. Overall, the group’s net sales declined by 9.2 percent in the first semester. Earlier this month, Wolfgang Werner, Praktiker’s CEO has resisgned, the announcement causing the company’s shares to rise by as much as 9 percent.

Alongside French rival Bricostore, Praktiker was among the first international DIY players to come to Romania. The local DIY market had been growing by as much as 30 percent year on year prior to the crisis. The situation changed dramatically afterwards, as construction and real estate froze and even small-scale home improvement projects were postponed. In 2009 the market was worth an estimated EUR 2 billion, but had plummeted by approximately 25 percent against the previous year. 2010 wasn’t any better, local retailers say, with the drop being estimated at around 15 percent. So far, the market has shown no consistent signs of recovery.

The recession also brought fewer new openings. The local Dedeman network, however, which is owned by Adrian and Dragos Paval, has managed to double its number of stores from 12 to 24 in the past two and a half years by investing an estimated EUR 150 million.