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OBI co-founder touts furniture in home centers

BY HBSDEALER Staff

Cologne, Germany Manfred Maus, the co-founder of OBI, Germany’s largest home center, pointed to furniture as the next big frontier of DIY retailing. On the show floor of the International Hardware Fair/Practical World in Cologne, Germany, Maus also pointed to a growing importance in Germany of service over price.

Maus, who officially retired from OBI in 2004, maintains an ambassadorial role with the company. OBI operates more than 330 stores in Germany, and more than 500 throughout Europe.

Asked to describe the changing retail landscape in Europe, Maus described Germany as the “world champion of discounts.” However, the growing importance of female customers is causing something of a shift, as service and quality are brought to the forefront, he said.

“Women are important, and women are different,” he said, discussing a European trend that trails the women-friendly retailing approach prevalent in the United States. “They decide whether we are going to buy a new kitchen, whether we are decorating. They need service, they need help, and this we learned in the last few years — price is not everything.”

Pointing to the observation that the best OBI stores are in Moscow, operating next door to IKEA stores, Maus described great potential for the combination of furniture and DIY.

“I’m not talking about adding a 20,000-square-meter IKEA and a 10,000-square-meter OBI to make a 30,000-square-meter store,” he said. “What I mean is to build a complete center under one roof, but telling the customer we are competent in paint, we are competent in lumber, we are competent in ceramic tiles, we are competent in tools, and also having a competence in furniture.”

He said no retail company is doing that well today.

“I think this is the future because we have too many home improvement stores that all look alike,” Maus said.

OBI (pronounced oh-bee) was founded in 1970.

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A.Burma says:
Apr-03-2012 10:54 am

If you get a quality product
If you get a quality product then obviously you would overlook the price factor. Consumers always look for good products. It does not make sense buying something useless at a cheaper price. While buying furniture keep the durability factor in mind. I recently bought Office Chairs from a reputed brand.

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France’s Castorama helps float Kingfisher

BY HBSDEALER Staff

While the United Kingdom-based B&Q chain of DIY retailers was weak in the fourth quarter, strong sales in France and Eastern Europe at the company’s Castorama branch helped float Europe’s largest home improvement company.

Kingfisher, parent of B&Q and Castorama, posted fourth-quarter sales of 2.18 billion British pounds (US$4.33 billion) up 4.8 percent from US$4.13 billion in the same period last year.

“Kingfisher’s international businesses, which account for more than half of group sales, continued to grow, with Castorama in France and Poland performing particularly strongly,” said Ian Cheshire, Kingfisher group chief executive. “Continuing this momentum will be our key international priority next year, along with addressing our performance in China.”

B&Q total sales were up just 0.2 percent in the quarter. The company revamped eight B&Q stores as part of a bid to restyle all of the country’s 324 stores. The retailer also launched new power tool, shelving and storage programs.

Sales at French Castorama stores rose 4.3 percent, with “continued penetration of [house brands] and strong sales.”

In the rest of Europe, sales rose 14.3 percent, “boosted by a strong end to the year in Poland.”

Asia sales were down 6.4 percent, “reflecting the continued impact of the slowdown of new apartment sales in the major Chinese markets and changing supplier regulations.”

Kingfisher operates Europe’s most well-known home improvement names, including B&Q, Castorama, Brico Depot and Screwfix.

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RONA sees earnings dip in fourth quarter

BY HBSDEALER Staff

Canadian home improvement retailer RONA saw earnings dip 19 percent in the fourth quarter, to $30.49 million from $38.11 million last year. Sales for the fourth quarter were $1.087 billion, down 4.6 percent from $1.14 billion in the same period last year.

The Boucherville, Quebec-based company said it has put into place “several new initiatives” to help “revitalize sales and optimize the RONA network.” The company took a one-time charge in the fourth quarter of $1.4 million to upgrade its supply chain.

“In the fourth quarter, market conditions became even softer than they had been earlier in the year, especially in eastern Canada,” said Robert Dutton, CEO and president of RONA.

As part of its efforts to increase sales, at the end of 2007 RONA acquired the specialty hardware, lumber and building materials retailer Dick’s Lumber, which gave RONA three new locations in Vancouver.

The company also said it would sell $30 million in land holdings in 2008 to offset lower consumer spending. The money is part of the company’s cache of funds to build new stores.

Due to RONA’s financial cycle, the full year 2006 had one additional week than the full fiscal year 2007. For the full year, earnings fell to $185.1 million from $190.6 million in 2006. Still, sales for the year rose 5.1 percent to $4.785 billion from $4.55 billion in 2006.

RONA operates approximately 620 stores of various sizes and formats across Canada.

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