COS hoping to table pre-crisis sales in 2013

The local office of Corporate Office Solutions is confident that it will manage to grow its turnover by about 27 percent this year to a total of EUR 15 million. Christophe Weller, the company’s managing partner, talked to BR about how the office furniture dealer is planning to reach this level and how COS has fared since it was set up 15 years ago.

By Simona Bazavan

How did the company do in 2012 and what are the targets for this year?

2012 was similar to 2011 in terms of sales volume, meaning about EUR 11.7 million. Over the past couple of years the share of furniture sales has been lower, at about 45 percent of the total turnover, while fit-out activities generated the rest. The furniture business was a bit slower because companies were buying less brand new furniture but if they relocated there were still some investments such as new carpets or new partitions that had to be made. This has been the situation ever since 2009.

Now we are seeing a different trend and we are optimistic that our turnover will return to about EUR 15 million in 2013 which was the level we had before the crisis. We have already signed contracts for more than EUR 2.5 million so far this year and about 65, 70 percent of it is furniture.

However, reaching this level will not happen in the same environment as five years ago. We need to sign more projects to reach EUR 15 million this year than we had to in 2008 and 2009. More projects and more people are needed to reach this level. The market is more complex and much more work is needed to sign a contract as clients are more demanding and attentive to their budget.

And beyond 2013?

It will really be to consolidate our structure. We currently have about 70 employees which is a structure that can carry what we do today, it can cover EUR 15 million and I am pretty sure it can carry even more. We want to reach EUR 20-25 million in five years.

Can one talk about a market recovery for the office furniture segment?

I think it is too early to talk about a revival, a growth trend at market level. I rather believe it has to do with the particularities of the local market and the fact that there are some sectors that are doing very well in Romania. And I am talking here about IT, call centers, some manufacturing relocations and energy. This is the trend in Romania and all the companies that are linked to these activities benefit from it.

There are no official statistics about the value of the Romanian office furniture market. I estimate that it will reach some EUR 35-40 million this year, retail sales not included, up by 25 percent y-o-y but still below the EUR 100-80 million it registered before the crisis.

Overall, I tend to be optimistic. I read the newspapers and I hear what politicians say and so on, and I am conscious that my words go against what you may hear today. But I trust what I see and hear.

How do you plan to increase your sales this year and beyond?

We are relying a lot on our office in Cluj-Napoca which was opened last year at the same time as Steelcase, our main manufacturer, opened a 100,000-sqm service center in the city for all of its dealers in Europe. I strongly believe the Cluj-Napoca office will do quite well this year and generate a total of some EUR 1.5 million and even more in the future. The rest will come mostly from Bucharest, Ploiesti and Pitesti. We also see potential coming from cities such as Timisoara, Arad and Iasi.

In Bucharest we are seeing many of our existing clients deciding to move, as through to the end of the year we will see the delivery of some new class A office projects and there will be relocations in some existing buildings.

And we are also looking for new clients. We have a big and well experienced sales force with 12 people here in Bucharest headed by a sales manager and a business development manager. In addition to this, we are looking to supply to new sectors such as hotels, hospitals and the education system.

Do you have any investment plans for 2013 and what have you invested so far in Romania?

Yes, we are revamping our showroom in Bucharest to show the latest innovations and trends in this field, which are towards more interconnection between employees. The project requires some EUR 130,000 and it will be ready in April.

It is hard to say how much we have invested over the past 15 years. I came to Romania in October 1997 and at that time, my partners and I decided to invest USD 200,000 in the local office. Since then, the shareholders have only reinvested the profit. We have reinvested an average of about EUR 100,000 per year except for 2007 when investments reached EUR 400,000 and the investments this year.

What would you say have been your company’s greatest challenge and greatest achievement in Romania since coming here 15 years ago?

Personally, I have enjoyed every year in Romania, that is for sure, but I can distinguish three different periods. The first was between the end of 1997 and 2002. This was like a pioneer period.

Then came the boom period of 2002-2008. It was a time when a lot of companies were very optimistic and were investing a lot, and we benefited from that. It was a crazy time but then the crisis came and the next period from 2008 until the end of 2012. In Romania the drop was less abrupt than in countries like Russia and Ukraine but even so many companies gave up on their plans to invest in office furniture or reduced their budgets. During this time it became more difficult to get projects and everybody was looking at every penny they were spending.

The crisis was the greatest challenge we have experienced.

But we adjusted. It meant that we had to be sharper and better than before. And it was a challenge not only for us to address our prices but in a way, and paradoxically, I had to increase costs to service the customers who were more demanding. We took the risk to increase certain costs and it paid off.

The achievement was that we dropped only 20 percent compared to the peak turnover we have ever reported of just below EUR 15 million in 2008 and 2009. And we have also managed to remain profitable throughout this period and continue investing.

simona.bazavan@business-review.ro

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