“We are open-minded”

Bulgaria is a relatively small market, in terms of home improvement as in other areas. There are only four companies competing for the favour of the 7.6 mio population in the mass-marketing DIY sector. Four? Expanding in the slipstream of the three chains that come from the West, Mr. Bricolage (ten stores, France), Praktiker (nine, Germany) and Baumax (four, Austria), is a home-grown company that has so far scarcely attracted any attention beyond the borders of Bulgaria. It is eight years since Praktis made its entry into the DIY market. At the end of April the only local DIY retailer opened its eighth outlet. And expansion is set to continue. “In the next five to six years we are planning one or two openings per year,” declares Lyuben Milchev. The proprietor of Praktis is no newcomer to this market. He has worked in the areas of builders’ supplies and related fields, such as flooring, for 20 years now. The target group that he wants to reach is correspondingly broad: it includes professionals in addition to end consumers, as well as companies carrying out major construction projects. Milchev sees the company’s involvement in DIY retailing, in the shape of the most recent opening in Haskovo, a town of 130 000 around 220 km south-east of Sofia, as “an investment not in the present but in the future”. For he believes that the DIY market in this country, which boasts a home ownership rate of an estimated 95 per cent, is only just starting up. What makes him so certain? On the one hand, his company has experienced steady growth in the past, showing sales growth of ten per cent in 2010 according to his figures. The sales outlets have also tended to become increasingly large: while the first store had a sales area of 1 200 m² plus a 600 m² garden area, the store in Haskovo achieves a total of 8 000 m². The number of employees has risen as well, to nearly 300 now. On the other hand, he considers that the basic economic conditions in Bulgaria, a member of the EU, are favourable. Although the average monthly income is no more than € 230, so that competition in DIY retailing comes largely through pricing, taxation is very low, and the currency is stable because it is linked to the euro. Milchev is sounding out various possibilities of cooperation with partners within the sector in order to maintain the accelerated pace of expansion. One of these could well be a joint venture. “We are open-minded,” he affirms. Download: