From furniture to real estate

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25 years ago, Dan Sucu (55) set out to make high-quality Romanian furniture. He had USD 1,000 to invest in his future business, which in the beginning he only saw as a way to make a decent living.

 In 1993, he attended a furniture fair in France, where he was fascinated by the office furniture and the leather sofas, which didn’t exist on the Romanian market. He had a space in the Unirea department store and he paid for his first merchandise shipment after he sold the house he had inherited from his parents for USD 55,000. His first order totalled USD 25,000; he sold it in two months and made a few thousand dollars in profit. Six months later, Dan Sucu was selling five trucks full of furniture every month. His business had boomed. The furniture was selling like hotcakes. While in its first few months Mobexpert would only sell 300 chairs per month, just one year later sales had grown to over 40,000 units per month. In 1994, Dan Sucu made his first million dollars in profit, with a turnover of about USD 13 million.

The money was reinvested in building a sofa factory, then a chair factory and eventually a furniture factory. In order to solve two important problems, namely the need to manufacture his own products as well as the need to escape the uncertainties of the foreign exchange rates, Sucu decided to buy two state factories that were already working in exports. He took part in two simultaneous auctions – for a factory in Dej and one in Targu-Mures – and he won both. Today, Mobexpert has nine factories across the country and it’s the largest local furniture manufacturer.

How to maintain growth

In the next few years, Dan Sucu is planning to open several Mobexpert hyperstores in cities like Cluj, Timisoara and Craiova. “The price of land has exploded in these cities, which is why we’ve decided to build ten-storey blocks above the stores, either for offices or for apartments, in order to recover a part of the investment,” Sucu explains. This year, Mobexpert will open a hyperstore in Constanta. “It’s being built on a surface of 11,000 sqm and it’s going to be our most beautiful store so far,” Sucu tells us.

The company’s 2018 sales are about 15 percent higher than those in 2017, when Mobexpert had a turnover of approximately EUR 178 million. “A 15 percent reported growth means an extra volume of merchandise that has to be sold, delivered, maintained, and so on. Two-figure growth from a low basis is not a problem, but it’s hard to manage at higher levels. We were aiming for an increase of around 10 percent, and we expected 8 percent. The doubling of this growth is a challenge. And almost 30 percent of it came from online sales,” he explained.

In the three days of Black Friday, online sales exceeded in-store sales. This is why Mobexpert is preparing new collections to be sold exclusively through their virtual stores. Their warehouse capacity will be doubled in order to develop the online side of the business, says Sucu.

The businessman is also prospecting external markets, namely an expansion of the brand towards Bulgaria or the former Yugoslavian countries. He says that he’s made an attempt at international expansion in the past, in 2007-2008, when the company opened a store in Sofia. “This failure cost us EUR 6-7 million,” he admits. But even though it clearly wasn’t the right time back then, Sucu is now optimistic about this kind of move. “We haven’t yet decided whether our entry on these markets will be done through online or physical stores,” he says.

One year ago, Dan Sucu made his first investments in real estate, together with Valentin Visoiu, the owner of Conarg Group, and developed Arcadia, the first major residential complex in Bucharest’s Domenii area. In October, construction began on the fourth building, which is due to be completed in March 2020. Of the 418 apartments currently in construction, 70 percent have already been sold. Dan Sucu also intends to develop a house complex in the Pipera area.

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