Ragnarok for dominant DIY player?

Bauhaus is finally opening its megastore there For a long time it went without saying that anybody who needed building materials in Iceland got them from Byko or Húsasmidjan/Blómaval, a subsidiary of Bygma, a Danish commercial house. The two trading companies had divided up the building materials and DIY market in Iceland between themselves, with insiders hinting of price-fixing and secret cooperation. Many, including not a few Icelanders, are hoping that this will now change, since the competition between retailers on their island is rated as underdeveloped, the prices as too high and the idea of ser­vice as in need of improvement. Bauhaus tried as long ago as 2003 to get a foothold on the market in Iceland, but was thwarted – many say unfairly – by the two competitors and by politics, so was forced to take the matter to the courts. Eventually the group was able to acquire a piece of land in Lambahagavegur in Reykjavík and erect a suitable building there as well. The opening was planned for December 2008, personnel had already been recruited – and then came the financial crisis. The employees were laid off again and the opening plans put on ice. Although it was stressed that delay does not necessarily mean cancellation, many Icelanders doubted that Bauhaus would ever open its megastore. Now the company has come to the conclusion that the Icelandic DIY market is worth getting into once again and is planning the store opening for this spring. The new Bauhaus store has a sales area of some 21 000 m². The product offer includes around 120 000 diffe­rent items, and the number of em­ployees will come to between 60 and 80. Bauhaus originally came to this icy volcanic island because of the supposedly strong position of the local currency, the Icelandic króna (ISK). It was important for Bauhaus, which generates over 70 per cent of its turnover in the EU and some 50 per cent in the euro zone, to have a foot in doors beyond its classic areas of expansion, in Iceland for instance. At the same time it is far from certain that Iceland has already left the downturn well behind. Data tend to point to a further downturn. And it is still not clear how the ISK will progress: stagnation on a low level or a steady recovery of the national currency. At any rate, the demand for real estate is in the process of rising again in Iceland. And even though the average Icelander is not a DIYer in the Swedish or Norwegian sense, consumers in Iceland appear to be much readier to spend…