Suzanne
24-02-06, 09:54 AM
German retailer Hit has retrofitted its initial plans for a network of hypermarkets in Bulgaria and will instead build shopping malls that will be leased to other companies, Dnevnik learned from Christoph Clavadetscher, co-manager of Hit owner Dohle Handelsgruppe, and Bernd Krause, executive director of Hit Bulgaria.
The two executives confirmed that the German company was contemplating a complete pull-out from Bulgaria in late 2005 - just 3 years after arriving on the market, but later decided to rethink its local strategy.
The new Hit outlets will be smaller and will be located in shopping malls that offer a range of other goods and services.
The 2 existing Hit hypermarkets are already getting a make-over. The store in the Mladost borough has rented out 2,000 sq m to other tenants and the outlet in the Lyulin borough will soon follow suit.
Hit is currently building a store in Pleven and pursuing a hypermarket site in Dobrich. The company plans to build 10 outlets over the next 5-6 years.
The main challenges of the local market are the low disposable income levels and the fact that Bulgarians are unaccustomed to have to drive to their shopping destination, said the Dohle executive.
One of the mistakes that Hit made in Bulgaria was to build outlets that were too big but did not carry a diverse enough selection of goods, said Clavadetscher.
Another challenge for the company is finding suitable hypermarket sites. The supply of such locations is very tight while the competition includes not only rival retailers but also property investment funds that operate with considerable acquisition budgets.
There was persistent talk in late 2005 that Dohle was considering backing out of the Bulgarian market.
Several sources told Dnevnik that the German company approached potential buyers for its existing hypermarkets. Lebensmittel Zeitung reported in November that Dohle was in negotiations with REWE, the owner of the Billa hypermarket chain, and Kaufland, the German retailer that is to launch its first Bulgarian outlet in March. Britain's Tesco was also reportedly interested in the Hit hypermarkets.
None of the mentioned companies confirmed that they had negotiated with Hit. However, Dohle did not deny that it had initiated preliminary talks with rival retailers at the time when it was rethinking its strategy for the Bulgarian market.
(Dnevnik) (http://news.dnevnik.bg/)
The two executives confirmed that the German company was contemplating a complete pull-out from Bulgaria in late 2005 - just 3 years after arriving on the market, but later decided to rethink its local strategy.
The new Hit outlets will be smaller and will be located in shopping malls that offer a range of other goods and services.
The 2 existing Hit hypermarkets are already getting a make-over. The store in the Mladost borough has rented out 2,000 sq m to other tenants and the outlet in the Lyulin borough will soon follow suit.
Hit is currently building a store in Pleven and pursuing a hypermarket site in Dobrich. The company plans to build 10 outlets over the next 5-6 years.
The main challenges of the local market are the low disposable income levels and the fact that Bulgarians are unaccustomed to have to drive to their shopping destination, said the Dohle executive.
One of the mistakes that Hit made in Bulgaria was to build outlets that were too big but did not carry a diverse enough selection of goods, said Clavadetscher.
Another challenge for the company is finding suitable hypermarket sites. The supply of such locations is very tight while the competition includes not only rival retailers but also property investment funds that operate with considerable acquisition budgets.
There was persistent talk in late 2005 that Dohle was considering backing out of the Bulgarian market.
Several sources told Dnevnik that the German company approached potential buyers for its existing hypermarkets. Lebensmittel Zeitung reported in November that Dohle was in negotiations with REWE, the owner of the Billa hypermarket chain, and Kaufland, the German retailer that is to launch its first Bulgarian outlet in March. Britain's Tesco was also reportedly interested in the Hit hypermarkets.
None of the mentioned companies confirmed that they had negotiated with Hit. However, Dohle did not deny that it had initiated preliminary talks with rival retailers at the time when it was rethinking its strategy for the Bulgarian market.
(Dnevnik) (http://news.dnevnik.bg/)