Bricomarché celebrates 30th anniversary

Bricomarché, the third-ranked French DIY retailer (behind the Kingfisher and Adeo groups), is tackling this new phase of its existence with all the more enthusiasm since completing 2008 with sales slightly up (€ 1.898 bn, or +0.7 per cent on 2007). This means it is doing better than the DIY retail sector as whole (-1.1 per cent), a situation that is being substantiated in 2009. The company shows a drop of 1.4 per cent in sales to the end of April, but this compares with a DIY market down by 2.7 per cent. “This anniversary is an opportunity to revitalize our banner. But above all we are independent storekeepers and well aware of the issues that affect us,” explains Frédéric Sambourg, deputy managing director of ITM Equipement de la Maison International. Big issues The first issue is the current stagnation of the French DIY market. Clearly the neighbourhood formats such as Bricomarché are standing up well. Every French household can find a Bricomarché less than 20 minutes away, and the company created an additional 58 000 m² of floorpspace in 2008. “We are second in the expansion league behind Leroy Merlin.” Today the company is positioned in the marketplace with a range of different store concepts that feature 540, 800, 1 500 and 3 500 m² of heated indoor retail area. However, Bricomarché no longer intends to develop the 540 m² format in 2010, apart from the odd exception. The second issue involves the reduction of the terms of payment. Even though the DIY sector has obtained a special dispensation to allow for a progressive reduction of the terms (a reduction of 15 days as of 1 January 2009, working up to the full 45 days at the end of 2011), members must already be envisaging a shortfall of an estimated € 110 mio in their working capital requirement. “Our stock currently totals € 440 mio. The change from a term of payment of 105 days to 60 days implies a 25 per cent reduction in our stock in order to remain within a model where financial coverage of the goods can be assured.” In other words, the company is at this very moment working to identify the SKUs which have a poor stock turnaround, seeking to reduce outer packaging, and reviewing transportation costs, etc. 400 outlets for the new concept The chain’s response to the current issues is expressed by the implementation of the second generation of its “singularization” concept (SV2): an improved response to customers’ expectations in terms of clarity of offer, attractiveness and price, all taking into…