DIY

DIY

Russian Metrika joins DIY group Bricoalliance

Russian DIY chain Metrika has joined international purchasing group Bricoalliance to see the Belgian based organisation spread further East. Bricoalliance's slow but steady expansion sees them enter the top league of European DIY chains, with (currently) 351 stores in 7 countries.

Saint-Petersburg group with experience and ambition

Metrika, a Russian group with its main focus on the Saint-Petersburg region, adds serious weight to the Bricoalliance basket: it counts on having a 400 million euro turnover and 55 stores at the end of this year. General manager Jeroen Lauwers is overjoyed: “this is a very strong group and an excellent addition for Bricoalliance, as Metrika is an independent retailer with a huge growth and impressive know-how”.

 

Metrika is special because it has an important assortment of private label products in addition to the A-brands. “This is an interesting strategy, and we certainly can learn a lot from Metrika's experience”, says Lauwers.

Expanding North and East

Bricoalliance, founded in Southern Europe in 2005 after Spanish Bricoking, Portuguese Mestre Maco and Italian Puntolegno joined forces, but its centre of gravity (and headquarters) shifted North when Belgian Hubo joined in 2006. The northbound expansion continued and the group had already conquered the Netherlands and Poland before entering the Estonian and Lithuanian market when Bauhof joined earlier this year. The Russian Metrika group now is the next step in that evolution.

 

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DIY

Home Depot victorious in American DIY battle

Home Depot, leader in the American DIY market, is slowly leaving Lowe's behind. For the second time in three months, the latter had to issue a profit warning while the former announced to expect higher profits. 

Lowe's low quarterly results

Lowe's results were below expectations in the second quarter of 2011. Turnover rose 1.3% to 10.1 billion euro, but on a like-for-like basis, sales went down 0.3%. Profits were marginally lower than one year ago, dropping from 579.3 to 578 million euro. 

 

The group had to close seven unprofitable shops and lowered its expectations for the whole financial year (ending on 3 February) from 4% to only 2%. The only growth the chain really expects comes through the internet, highlighted by the opening of the Spanish language version of their website just this week. Another source of hope for Lowe's is the redecoration of its stores.

Home Depot growth causes Lowe's demise

Lowe's's downfall is caused largely by Home Depot's fierce competition, according to analysts. The latter was larger than Lowe's for the ninth quarter in a row, rising 4.3% worldwide. Total turnover was 14 billion euro, rising 4.3% worldwide. Net profits rose too, from 829 to 847 million euro. Unlike its main competitor, Home Depot confirms its expected growth of 2.5%.

 

Both Home Depot and Lowe's complain about the low consumer confidence in the US, causing many Americans to cancel their renovation plans. However, Home Depot did profit from spring sales and the damage caused by tornadoes. 

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DIY

Focus DIY goes into administration

British DIY-retailer Focus went into administration yesterday, putting nearly 4000 jobs at risk. The chain currently has 178 stores throughout the UK, and analysts expect that they will work normally until administrators are officially appointed, probably at the end of next week. Last year, Focus made made a pre-tax loss of 24 million euro.

 

Reportedly owners Cerberus, who bought Focus for just £1 (€1.12) in 2007, have asked Ernst&Young to handle the administration process. Despite Cerberus's investments of probably around 220 million euro, Focus's debts have risen from 190 million to 260 million euro in those four years. Focus suffers mainly from the recession in the economy and falling consumer confidence, but also from tough competition from Wickes – the brand that, ironically, Focus owned until 2005.

 

A statement from Focus said yesterday: “Following notification of an event of default under the senior credit facility, and a realisation that there were no alternatives that could be explored any further, Focus directors have come to the conclusion that to protect the interests of creditors they have no choice but to seek protection through filing a notice of intention to appoint administrators.”

 

Several analysts wonder if it is private equity group Cerberus who caused Focus to fail, as their short time pressure might have endangered Focus's long term vision. Several DIY chains in the Benelux, like Brico and Praxis, are also private equity-owned. 

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