“We open new stores”

A lot has happened in the Bulgarian DIY market this year - at any rate, it has been eventful for operators of DIY stores in the country, even if not for their customers. This is because the Bulgarian subsidiary of the failed German chain Praktiker AG was sold following its bankruptcy to the investor Videolux, which intends to continue running all nine stores under the Praktiker brand.This was followed in September by the announced exit of the Austrian home improvement retailer Baumax from Bulgaria. The Baumax subsidiary and its eight stores in Bulgaria were likewise bought by a Bulgarian investor, Haedus JSC, which also intends to carry on operating the overtaken outlets.The only domestic player in the DIY market up to now has been the Praktis chain, which has its background in the building materials and property sector. In spite of the continuing reluctance of consumers to spend, the company is sticking with its expansion strategy, as Praktis boss Lyuben Milchev confirmed to DIY International.How would you describe the current situation of the Bulgarian DIY market and of the Praktis chain?Lyuben Milchev: The economic situation in Bulgaria is still tough and not stable at all. Since 2007 sales have been at a very low level and there hasn't been any significant change up to now. Actually, the most embarrassing circumstance is that there are no real prospects of improvement in the situation. I think that this fact was well known to foreign investors and the consequences are obvious to all of us - they left the country. We saw that the "western business model" did not work in Bulgaria in a time of crisis. This is confirmed by the fact that the businesses of both Praktiker and Baumax in Bulgaria were purchased by Bulgarian investors.

What are the consequences of Praktiker's failure and of Baumax's announcement that it was to close stores in Bulgaria and leave the country?Praktiker was bought by Videolux, which is active in the household appliance retail market. They are trying to expand their business by entering the DIY sector.Baumax was bought by a big holding company with some experience of the retail market with home decoration and accessories.They will not close stores. The new owners will try to stabilise and restructure the business and will keep the…