French furniture chain, Conforama, may add 30 new Italian stores over five years and is in talks to enter North Africa, seeking countries with stronger demand than its home market.
“Italy is a very promising market with lots of potential because it’s still quite fragmented,” Conforama Chief Executive Officer Thierry Guibert said at a Paris press conference today. After shutting four unprofitable Italian stores last year, Guibert drew up a plan for new outlets in and around big cities.
While Italy’s economy has not been especially stronger than that of France, Italians are more willing to spend money on furniture than the French are, Guibert said. Conforama, which has 182 outlets in France, has begun refurbishing stores, adding new products such as tableware and offering bigger discounts.
“‘The economic environment is still very difficult,” Guibert said, citing France and Spain. “We have to give something extra to the customer and be competitive on prices.”
Conforama’s goal is to offer lower prices than competitors while expanding selection and introducing trendier designs, Guibert said.
French Spending
French spending on furniture and appliances fell 10.8 percent in August, according to the country’s central bank. Conforama’s competitors include Sweden’s Ikea for furniture and Kesa Electricals Plc’s Darty appliance chain.
The executive aims to renovate 9 French outlets by the end of the year and refurbish up to 40 stores in the next two years. An average store overhaul costs about 2.5 million euros ($3.7 million), he said.
The chain will also expand its selection of home decoration items, whic could represent more than 15 percent of sales by 2013. Internet sales, which now account for less than 2 percent of revenue, may represent 10 percent by 2013, Guibert said.
Negotiations with potential partners in North Africa are going well, and the French chain may open its first store in Morocco by the end of 2010, Guibert said. Conforama may also add as many as seven stores in Switzerland and is aiming to enter Brazil in the years to come, he said.
Conforama accounts for almost 16 percent of sales at PPR, which is better known outside France for its Gucci Group luxury unit. Sales at Conforama fell 11 percent in the first half of the year.
