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John Herbert, EDRA: I expect sales for DIY retailers to increase "double digit" in 2010

www.retail.ru: John, is it true that you know all DIY retailers in the world personally? Which one is the most successful in your opinion?

John Herbert: I have been fortunate to have visited almost every continent in the world although I still have not been to India ( I am going in

September) and Japan and have personally visited all the major DIY companies. Amazing is that there is no global player and ever

continent has its own market leader . For example, in the North American Market you have the Home Depot and Lowes, in South America Sodimac, in Australasia Bunnings. Having spent almost 50 years in this «people business» retailing, local culture plays a major part. I personally think that we shall never see a global DIY player.

www.retail.ru: John, tell as concisely about new «after crisis» customers demands to DIY operators in the Europe. May be you can point any new challenges in the «after crisis» word for the DIY retailers?

John Herbert: The DIY business has experience a boom for many years and the financial crisis came a shock for many and some companies now no longer exist. The larger ticket items have slowed down yet the consumer is still investing in improving the home. The challenge is to find the right products the customer now needs.

www.retail.ru:What was the sales slowdown among European DIY retailers in 2009? What the situation with sales in DIY segment now in Europe?

John Herbert: The sales slowdown differed from country to country. Germany for example had no negative sales whilst the UK and France sales were only slightly down. Ireland, Spain and many ex eastern Block countries suffered the most and Russia was almost 30% down!. All is all the negative trend seems to be almost over and the general feeling is that the situation is slowly getting better. Indeed some Russians DIY Chains are reporting double digit sales increases.

www.retail.ru:Which ways European DIY retailers did costs saving during the crisis time (2008-2009)?

John Herbert: In the past costs were always controlled and measured but the crisis brought about new thinking on this and the major companies I know have reduced costs dramatically. For example B-and-Q in the UK registered about 2% less sales for the first quarter yet profits were up. B-and-Q cut costs and improved margin. One of the main factors was reducing stockholding thus increasing stock turn and reduction of overheads.

www.retail.ru: What is DFM format (Do It For Me)? Most of Russian retailers know nothing about this.

John Herbert: The CEO of Kingfisher mentioned DFM as a trend at the Russian DIY Forum. This refers to people who are maybe a little better of financially than the average person and have the money to have things designed and installed rather than «do it yourself». This is a

particular trend with the older generation who seem to have some extra cash and maybe not the energy or know how to do this work.

www.retail.ru: What is you assessment for Russian DIY market and your personal impression about Russian DIY retailers?

John Herbert: The Russian market is perhaps the No 1 boom market for DIY in the world today. We are going to see considerable growth in the coming years and it will be interesting to see who will be the winners in this market in the future.. I am amazed just how good Russian DIY companies are. They have learned very quickly and I have the utmost respect for them. From all I heard and saw in Moscow at the excellent DIY Forum I expect sales to increase «double digit» in 2010.

www.retail.ru: Do you know about any DIY retailers intentions for entering Russian market soon?

John Herbert: No, We already have the European leaders here with Castorama. Leroy Merlin, OBI and Kesko. I do not see in the foreseeable future any significant European player nor any major American player coming into the Russian market.

www.retail.ru: How would you finished the phrase: “European DIY retailers are… , and Russian retailers are …“?

John Herbert: European Players are very professional and will continue to grow by developing their business in emerging markets. Russian retails are also becoming increasingly professional and due their culture will always have a dominant place in the Russian market place.

To conclude I remember someone asking in a discussion group at the Russian DIY Forum if Russia would end up like Poland with no dominant player. The major players in Poland are from Western Europe. Ian Cheshire the CEO of Kingfisher said he felt there was no danger of that happening in Russia because the Russian DIY companies were there before the major players from Europe arrived. In Poland that was not the case. I would go further. I was the CEO of a small 10 store DIY Chain in Germany called Knauber, the toughest DIY market in the world and Knauber because if its high service level and dedication to customer service survived and today is still doing very well. Especially in the «peoples business» retailing there will always be a place for any company large or small who passionately and professionally go about their business.

John Herbert has spent over 45 years in retailing.

In 1977 he became the Store Director of the very first Sainsbury’s SavaCentre hypermarket in Washington, Tyne & Wear. From 1979 – 1983 John Herbert was managing large hypermarkets in Germany.

In 1983 he was appointed the Managing Director of Knauber (a family owned DIY chain in Germany), which was recognised by the Home Channel News USA, the leading trade magazine, as one of the best world stores.

In 2001 he was appointed by Arthur Blank, one of the founders of Home Depot, as President of the EXPO Design Center West Coast, USA, responsible for EXPO Stores in California, Colorado and Texas.

In 2002, he was appointed managing director of the BHB, the German Home Centre Retailing Association. He left this position at the end of 2009.

Since 2004, John Herbert has been the General Secretary of EDRA, which until the end of 2009 was administrated by the BHB.

 by Elena Kadochnikova



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