German DIY retailer Praktiker reported for Romania net sales worth EUR 38.9 million in the first semester of this year, down 9.8 percent y-o-y (down 10.2 percent like-for like). The announcement comes after in the first quarter Praktiker reported another 10.6 percent decrease and the retailer’s sales on the local market have been on downward trend since 2008.
Tough economic conditions are the main factor behind the decrease, says the company.
“Consumer reluctance lingered in most countries in Eastern and Southeast Europe on account of the persistently tough economic conditions. This mainly affects countries such as Greece, Poland and Romania which traditionally contribute substantial shares to consolidated sales,” reads the company’s report.
In order to stabilize sales and earning on the international segment Praktiker has made several marketing changes. In Romania it has “completely revised” its pricing policy by focusing on certain products across all ranges and highlighting them as ‘best choices’.
The Praktiker Group operates – including Max Bahr – around 440 home improvement and DIY centers in nine countries. About 110 stores are outside Germany, 27 of which are located in Romania, its largest external market. The retailer also has operations in Luxembourg, Greece, Poland, Hungary, Turkey, Bulgaria, Ukraine and Albania.
In light of poor results abroad, Praktiker’s main shareholder, Maseltov, would want the company to close its operations inEastern Europe, according to information published by Financial Times Deutschland (FTD) in March.
A general divestment is not on the agenda of Praktiker’s management board, said Thomas Fox, CEO of Praktiker AG, adding that a differentiated view should be taken with regard to the international business activities.
In the H1 2012, the Praktiker Group generated sales of EUR 1.54 billion down 4.5 percent y-o-y. Sales in Gemany totaled EUR 1.1 billion down by 1.7 percent y-o-y. The group’s operating earnings (EBITDA) remained negative in the second quarter at EUR 8.6 million but improved by EUR 63.4 million as against the previous year. An operating net loss of EUR 70.7 million was reported for the first half of the year.