Total restructuring at Baumax

Baumax needs superhuman powers. The Austrian DIY retailer has been hit especially hard by the consequences of the global economic crisis in the countries of southern Europe. The competitive situation and the economic future of the company, which is based in Klosterneuburg near Vienna, look far from rosy, what with critical events that develop in different ways from country to country but are basically similar, with a sometimes dramatic fall of the population’s income, with consumption in decline and a parallel increase in the savings rate. The key point of the group’s reforms is the introduction of elements of the Category Management system. The Baumax holding company is being organised around three category groups, Garden, Home and Building/Technology, plus a Central Purchasing element. The central units of the different categories are responsible for all activities that are customer-relevant, while Central Purchasing makes decisions on supplier contracts, purchase prices, etc. There are nine national companies (now for the first time including Austria and its recently inaugurated headquarters in Klosterneuburg) subordinate to the Baumax holding company, each with its own country managing director and a country category manager. The company now intends to appeal more strongly to small contractors as a group, in addition to the core target group of typical DIYers. According to board member Jörg Greimel, the appeal that the current Baumax stores have for this target group is fairly limited. Which is why the company has substantially topped up the level of personnel in the individual stores. Special technical advisers with responsibility for sales alone, and project consultants working in the field have been appointed to generate greater awareness of Baumax and its services and to increase sales as well. So far about 250 new jobs have been created in this area and new staff appointed. Measures are also been taken in terms of the product assortment. Up to now the entry-level brands have made up nearly 30 per cent of total sales. “Clearly too much,” says Greimel. In order to appeal to more professional customer groups, and to make inroads into the specialist trade, both product range and presentation must be upgraded: specialist trade brands on the one hand, specialist product displays on the other (structural elements, flooring, bathrooms, etc). In addition, on April 1 Baumax acquired “Die Hausprofis”, a company dedicated to fitting and installation services…