Doverie Brico

completed

A DM29.4 million (US$15.5 million) project for the construction and operation of a five-store integrated distribution system in Bulgaria and Macedonia. The distribution system will carry the name of Mr. Bricolage (the franchisor), and will offer a wide variety of home improvement/repair products, as well as specialized services. The project will be implemented in stages over a three-year period. The first store will be opened in Sofia in year 2000. The second and third store will be opened in Scopje and Burgas in year 2001, and the other two stores (in Bulgaria) - in 2002.MarketThe market potential for home improvement products and services in Bulgaria and Macedonia appears to be strong. Compared to other Central and Eastern European countries, much bigger number of Bulgarian and Macedonian families own their homes, and often second homes "villas" (over 90% of the housing in Bulgaria is owned by individuals). Also, a greater number of Bulgarians and Macedonians do home improvement/repair works themselves, including more sophisticated ones, such as wall painting, fixing of wall paper, ceramic floor coverings, mosaics, carpentry, etc.This peculiarity was partially due to the fact that during the years of the state planned economy, the SME sector, including home repair/improvement and construction services, was underdeveloped and people were forced to do home repairs/improvements by themselves or ask for the help of friends and relatives. The economic difficulties in Bulgaria and Macedonia in 1996/97, compounded by the effect of regional tensions, resulted in a decrease in the share of home repair/improvement expenditures in total family budget. During the same period, most of the households postponed needed overhaul and repair works. From 1998, the spending on repair/maintenance, as well as on new construction started to increase. It is expected that this trend will continue in the forthcoming years and the share of the repair/maintenance expenses in the family budget will eventually recover to 1994-1995 levels (about 5% of total family budget or about DM 150 per household per annum). Particularly in Bulgaria, the home improvement distribution system concept is not new. In the 70’s and 80’s, the state owned Do-It-Yourself small store chain in some of the big Bulgarian cities was very successful, but it disappeared with the privatization and restitution as most of the stores were returned to their original owners, who changed their profile. Currently, the market for home improvement products and services is very fragmented. Small shops, offering limited variety of products with questionable quality emerge and disappear and the average customer spends much time and energy even for the simplest type of home improvement project. There are no stores carrying a wide range of home improvement products, and offering supplementary advice and services. Doverie Brico will be the first in the market.