Obi: Formula for success

The first OBI store, with a retail area of 900 m²,  was inaugurated 30 years ago in Hamburg. The store was run by employees of Emil Lux, a tool wholesaling company which recognized the potential offered by marketing a wide DIY product range under one roof. However, there was a reluctance to enter into competition with the company’s own customers, the retailers; on the contrary, retailers were to be brought on board as partners, for a franchise association in the DIY sector. Thus the first store, in Hamburg’s shopping centre, acted as a “show” store with a range intended to win over potential franchisees. But although the money invested yielded a return as planned after one year, it was still two years until the next OBI store was to appear. Stores then followed in quick succession, however, with 14 OBI sites in 1974, and 34 three years later, although it was not hardware dealers who were persuaded to become franchisees, but builders’ merchants and timber merchants, along with inde-pendent backers.
The first OBI store was inaugurated in Hamburg.
It is precisely this franchise system which has been the guarantee of success, OBI co-founder and partner Manfred Maus stresses. Franchising makes it possible “to combine the advantages of a large company with those of a small company”. The strengths of a large structure (central buying and logistics, joint advertising etc) would be linked to the advantages of flexible, local enterprise in smaller units.
In the 1970s, DIY was still regarded as a pursuit for poor people, as well as being a purely masculine preserve. Only those who couldn’t afford to pay a professional did it themselves. Gradually, however, DIY also became an act of self-realization: building and designing something by oneself. OBI was the first company in the market to launch a gardening department in September 1973, opening the way for women into the DIY store. Now more than half of all customers are female.
The 400th OBI store in Hamm was designed and fitted out with environmental considerations in mind.
OBI expanded: in Germany, in Europe and also in the Far East. The number of OBI stores worldwide is now 434. The company has been operating in Italy since 1991 (26 stores), in Hungary (11) since 1994,  and in Austria (29) and the Czech Republic (14) since 1995. It is also active in Poland (16) and Slovenia (1), and since 1999 also in Switzerland (1) as well. Since 1 June this year OBI has been open for business in Wuxi, a city of four million people one and a half hour’s drive from Shanghai, where it also intends to open a store. The company is looking to enter the Slovakian market in the coming year, and there are concrete plans to expand in Croatia as well.