April 18, 2013 / 11:36 AM / 4 years ago

UPDATE 1-Kingfisher enters Romania as Debenhams exits

* Kingfisher buys 15 stores in Romania

* Kingfisher sees scope for 50 Romanian stores

* Debenhams closes 6 stores, exits country

* Debenhams books 3.8 mln stg write-off

LONDON, April 18 (Reuters) - Kingfisher, Europe's largest DIY retailer, said it was expanding into the "attractive" Romanian market, just as British department store group Debenhams quit the east European country, blaming difficult trading conditions.

Kingfisher said on Thursday it had purchased Bricostore's 15 stores in Romania from French firm Group Bresson for an undisclosed sum.

The British firm plans to convert the stores, which made a profit of 5 million euros on sales of 131 million euros last year, into the Brico Depot format it trades in France and Spain.

It sees scope to grow the business to around 50 stores.

"Romania is an attractive, growing market for home improvement, with the organized part of the DIY market having trebled in size since 2005 to around 1 billion euros in 2011," it said.

The deal is planned to complete in the next two months and is expected to be earnings neutral in the first year.

Kingfisher's upbeat tone contrasted sharply with that of Debenhams, Britain's second largest department store chain.

As it published interim results it said it had closed its six franchise stores, quit the market after a six year stay and booked a 3.8 million pounds ($5.8 million) write-off.

"We got to the situation in January of this year where as a result of continued tough trading we collectively decided to close the doors," Chief Executive Michael Sharp told reporters.

He said the Debenhams concept in Romania - predominantly clothing stores as opposed to full range department stores - was not suited to the market, while its franchise partner struggled to pay its bills.

Debenhams is not alone amongst British retailers in finding eastern European markets hard going.

On Tuesday, Philip Clarke, Chief Executive of Tesco , Britain's biggest stores group and the world's third largest, said fallout from the euro zone debt crisis on eastern European markets had created "the worst set of economic circumstances for consumers since the end of communism."

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below