Company officials say that the significant growth registered in recent years allows Dedeman to cope with a 10 percent decline of the market in order to maintain profitability, but that a 30 percent drop in sales would have a significant impact. “It would be a disaster for the market,” said Dragos Paval, the group’s President, who is also one of its shareholders.
According to Paval, limited access to lending will boost client interest in inexpensive construction materials. This trend was already visible in the first three months of 2009. This is likely to affect the group’s profit margin. Last year, Dedeman had a 10 percent gross profit margin.
The company opened its first store in Bucharest last weekend, leading the network to a total 13 units, following a €12 million investment. Two further shopping centers are to be opened this year. “We decided to go on with network expansion, because there is still a need for new homes in Romania,” Paval said.
The company’s main competitors are Ambient, Praktiker, Bricostore, Arabesque, Baumax, and Hornbach.
