Baumax

Last updated
bauMax AG
Company type Private
Industry Retail
Founded1976 (1976) in Klosterneuburg, Austria
Founder Karlheinz Essl Sr.
Defunct2016 (2016)
FateDissolved
Headquarters Klosterneuburg, Austria
Key people
Michael Hürter, CEO
ProductsHome improvement products
RevenueDecrease2.svg €1,130 million [1]  (2013)
Decrease2.svg (€189 million) [1]  (2013)
Number of employees
6,200 [2]  (2015)

The Baumax AG (own spelling: bauMax) was an Austrian chain of home improvement stores. It was founded in 1976 by Karlheinz Essl Sr. in the city of Klosterneuburg and operated more than 150 stores in Austria and several countries of Central and Eastern Europe. As of 2010, the company employed over 9,000 people and generated an annual revenue of 1.13 billion euros. The business came into financial trouble during the Great Recession. It was finally broken up by creditors in 2015/16. [3]

Contents

History

bauMax store in Dornbirn, Austria MegaBaumax6.jpg
bauMax store in Dornbirn, Austria
bauMax store in Baden, Austria Baumax-Baden 8752.JPG
bauMax store in Baden, Austria
Interior of a store in Presov, Slovakia Baumax11Slovakia5.jpg
Interior of a store in Prešov, Slovakia

In 1958 Karlheinz Essl Sr., son of a food wholesaler from Carinthia, went to the City of New York to study the principle of self-service stores of American supermarkets. Back home he decided to transform the building materials business of his father-in-law into self-service operation by 1976. The concept proved successful, and by the mid-1980s, the company was the clear market leader in Austria. [3]

Immediately after the fall of the Iron Curtain, Mr. Essl faced the crumbling facades of the former Eastern Bloc countries and realized that he had found a huge new market for his building supplies. Already in 1992 the first stores were opened in the former Czechoslovakia. Within the next 20 years, more than 50 additional stores were erected in Slovenia, Hungary, Romania, Bulgaria, Croatia and Turkey. By 2010, Baumax operated 160 stores in nine countries and employed over 9,000 people. [3]

In 1999, Karlheinz' son Martin Essl became CEO, but the former still interfered heavily with daily business and met most of the operational decisions. This constitution became particularly problematic as Karlheinz Essl proved unable to cope with the task of running a business of such size properly. Moreover, he was almost immune to any suggestions and did not have any belief in his management staff at all. [3]

As competitors had increasingly caught up by the early 2000s, Baumax' profit margins eroded. The company faced a lack of financial resources for their expansion plans which was increasingly compensated by large bank loans. When the world economy was hit by the Great Recession and sales declined in many markets, the company ran into financial turmoil. [3] In 2011, the Baumax Group lost 57.2 million euros, in the following year another 126 million euros. [4] At that time, creditors forced the board to elaborate plans for turning the company around, whose contents reached the general public by 2014.

According to these papers, the Baumax Group had more than one billion euros of debt, one out of three stores generated a net loss, often without any chance of significant improvement. Particularly, many of the foreign subsidiaries would have had to make losses for years until they would reach their break-even point. Without proper measures the company would have had to face bankruptcy by early 2014. [5]

The reasons for the crisis were not primarily due to the unfavorable macroeconomic developments, but were based on errors of management. The papers stated an "unclear target group orientation with an uncoordinated price and assortment policy" that had developed due to "deficiencies inside the management organization." The company priced too aggressively and had too few brands within their range of products. Stores were not located wisely and their sales areas were too different in size to enforce a groupwide uniform store concept. [5] Moreover, the organization had not kept up with the increasing size of the business; even 20 years after expansion into foreign countries had begun, there was no centralized management in many areas. [4]

Despite all those difficulties management continued its strategy of expansion and opened yet further stores. [3] However, after another huge loss in the fiscal year of 2013, the Essl family had to withdraw from office [4] and Baumax fell to the creditor banks, who finally decided to break up the company. The subsidiaries in Romania and Bulgaria were sold, the stores in Turkey, Hungary and Croatia were closed. [3] By the end of August 2015 it was announced that the German DIY chain Obi would take over 70 Baumax stores (of which 49 are located in Austria, 14 in Slovakia, two in Slovenia and five in the Czech Republic) for nearly €200 million. [6]

In 2015 Polish DIY chain Merkury Market took over 18 of 24 Baumax stores in the Czech Republic and continuously operates all acquired stores under the Baumax brand. 7 8

Subsidiaries

CountryFirst storeNo. of storesFate
Flag of Austria.svg  Austria 19766549 stores sold to Supernova and rebranded to OBI, [7] 6 to Hagebau and 1 to Hornbach.
Flag of the Czech Republic.svg  Czech Republic 19922418 stores sold to Merkury Market [8] and 5 to Supernova and rebranded to OBI. [7]
Flag of Hungary.svg  Hungary 199215Sold all stores to furniture chain XXXLutz. [9]
Flag of Slovakia.svg  Slovakia 199414All stores sold to Supernova and rebranded to OBI. [7]
Flag of Slovenia.svg  Slovenia 19952All stores sold to Supernova and rebranded to OBI. [7]
Flag of Croatia.svg  Croatia 20007Insolvent and closed stores in 2014. [10] In 2016 stores were sold to Tokić.
Flag of Romania.svg  Romania 200615Sold all stores to Groupe Adeo and rebranded to Leroy Merlin. [11]
Flag of Bulgaria.svg  Bulgaria 20088Sold all stores to investor Haedus JSC and rebranded to HomeMax. [12]
Flag of Turkey.svg  Turkey 20107Closed stores in 2014. [13]

Related Research Articles

<span class="mw-page-title-main">Metro AG</span> German multinational wholesaling company

Metro AG is a German multinational company based in Düsseldorf which operates business membership-only cash and carry stores primarily under the Metro brand. As of March 2024, Metro is operating 626 wholesale stores in 21 countries, including Europe, Kazakhstan, and Pakistan.

<span class="mw-page-title-main">Billa (supermarket)</span> Austrian multinational supermarket chain in Central, Eastern and Southeastern Europe

BILLA is an Austrian supermarket chain that operates in Central, Eastern and Southeastern Europe. The company was founded by Karl Wlaschek in 1953. He sold his controlling interest to Germany's REWE Group in 1996.

<span class="mw-page-title-main">Focus DIY</span> UK building materials store chain

Focus was a British do-it-yourself and home improvement retailer, founded in 1987.

<span class="mw-page-title-main">BAWAG P.S.K.</span> Fourth largest bank in Austria

BAWAG P.S.K. is the fourth largest bank in Austria. It was formed on October 1, 2005 by the merger of the separate banks P.S.K. and BAWAG.

<span class="mw-page-title-main">UniCredit</span> International banking group

UniCredit S.p.A. is an international banking group headquartered in Milan. It was Italy's only systemically important bank and the world's 34th largest by assets. It was formed through the merger of Credito Italiano and Unicredito in 1998 but has a corporate identity stretching back to its first foundation in 1870 as Banca di Genova. UniCredit is listed on the Borsa Italiana and Frankfurt Stock Exchange and is a constituent stock of the Euro Stoxx 50 index of leading shares.

<span class="mw-page-title-main">Praktiker</span> German defunct hardware store chain

Praktiker AG was a German hardware store chain which operated in Europe. It was based in Hamburg and opened its first store in 1978 in Luxembourg under the name bâtiself. Initially owned by ASKO, the chain became a division of Metro AG after the merger of ASKO with Metro Cash & Carry in 1995. It was spun off under the name Praktiker Holding in November 2005 and listed on the Frankfurt Stock Exchange. Since 2006 until 2011 was listed on MDAX and since 2011 until 2013 on SDAX.

<span class="mw-page-title-main">Kaufland</span> German multinational hypermarket chain owned by Schwarz Group

Kaufland is a German hypermarket chain, part of the Schwarz Gruppe which also owns Lidl. The hypermarket directly translates to English as "buy-land." It opened its first store in 1984 in Neckarsulm and quickly expanded to become a major chain in what was formerly West Germany. It operates over 1,500 stores in Germany, Croatia, the Czech Republic, Slovakia, Poland, Romania, Bulgaria and Moldova.

Digi Communications N.V., also known as DIGI Group, is a Romanian telecommunications holding company, which also has businesses in Spain, Italy, Portugal and Belgium. The firm has current statutory seat in the Netherlands and headquarters of effective management in Romania. Digi was founded by Zoltán Teszári, who is the majority shareholder, and has been listed on the Bucharest Stock Exchange since May 16, 2017.

<span class="mw-page-title-main">Hornbach (retailer)</span> German DIY-store chain

Hornbach Baumarkt AG is a German DIY-store chain offering home improvement and do-it-yourself goods. Hornbach is one of the leading DIY-store chains in Germany. In the 2020/2021 financial year, the Hornbach Baumarkt Group generated sales of Euro 5.1 billion. The stores are owned and operated by Hornbach Baumarkt AG.

Tengelmann Twenty-One KG is the Munich-based Holding of the Tengelmann Group, a family-owned company established in 1867. The company identifies as an active entrepreneurial family investor, currently holding shares in more than 50 companies in Europe and North America. The diverse portfolio includes large retailers such as OBI and KiK, the real estate company TREI, the energy consulting company Tengelmann Energie, the insurance company Tengelmann Assekuranz as well as Tengelmann Audit. Their affiliated investment companies Tengelmann Ventures, Emil Capital Partners and Tengelmann Growth Partners invest in Start-ups and Grown-ups in Europe and North America.

<span class="mw-page-title-main">Bricostore</span>

Bricostore was a French home improvement retailer which operated stores in France, Hungary, Romania and Croatia. Founded by the French Bresson family in Paris in 1991, the company operated 7 stores in France until 2001, when they sold 6 stores to Bricorama and closed the remaining one.

OBI GmbH & Co. Deutschland KG is a German multinational home improvement supplies retailing company. It is headquartered in Wermelskirchen and operates 668 stores in Europe, of which 351 are in Germany.

The KontronGroup of enterprises is an IT consulting, products and services provider with its head office in Linz, Austria.

<span class="mw-page-title-main">REWE Group</span> German supermarket corporation

The REWE Group is a German diversified retail and tourism co-operative group based in Cologne, Germany. The name REWE comes from Revisionsverband der Westkauf-Genossenschaften", meaning "Western Buying Co-operatives Auditing Association".

<span class="mw-page-title-main">Bauhaus (company)</span> German retail chain

Bauhaus AG is a German pan-European retail chain offering products for home improvement, gardening, and workshop. The name contains the German words bauen and Haus (house), but also alludes to the modernist Bauhaus school and the company's founder and owner, the German billionaire Heinz-Georg Baus.

The international Essl Social Prize was founded in 2007 by Martin and Gerda Essl, owners of the Austrian home improvement company bauMax. The prize was awarded annually by the Essl Foundation between 2008 and 2012, and once again in 2013/14. It supported projects developed by social entrepreneurs and prize winners were awarded 1,000,000 Euros prize money.

<span class="mw-page-title-main">Grazer Wechselseitige Versicherung</span>

Grazer Wechselseitige Versicherung or Graz Mutual Insurance Company is one of the largest Central European insurance companies. Its headquarters are located in Graz, Austria.

<span class="mw-page-title-main">Globus (hypermarket)</span> German retail company

The Globus Group, led by Globus Holding, branded as Globus, is a German retail company based in Sankt Wendel, Saarland (Germany). The Globus Holding includes the Globus hypermarkets in Germany, Russia and the Czech Republic, as well as the Globus DIY stores.

Arabesque is a Romanian company based in Galați, which distributes building materials and operates hardware stores. The network comprises 7 Mathaus DIY stores and 22 Arabesque warehouses in Romania. It also operates 6 warehouses in Moldova, Bulgaria and Ukraine. The company was founded in 1994 and is owned by Romanian businessman Cezar Rapotan who also owns shares of the manufacturer of steel structures Sibel FIERCTC and of the energy solutions company Chorus Marketing and Distribution.

Frank Philipp Albert is a German real-estate entrepreneur and founder of Supernova-Group, of which he has been the chief executive since its founding.

References

  1. 1 2 "bauMax-Jahresabschluss 2013". baumax.at. 2014-06-23. Retrieved 2015-09-21.
  2. ↑ "-: Allgemein : bauMax im Überblick". baumax.at. 2015. Retrieved 2015-09-21.
  3. 1 2 3 4 5 6 7 Christina Hiptmayr (2015-08-22). "bauMax: Familie Essl vor den Trümmern ihres Lebenswerks". profil.at. Retrieved 2015-08-24.
  4. 1 2 3 Miriam Koch/Angelika Kramer/Peter Sempelmann (2014-04-03). "Baumax - Ein Familiendrama in vielen Akten". format.at. Retrieved 2015-09-20.
  5. 1 2 Christina Hiptmayr (2014-04-05). "Baumax: Der geheime Restrukturierungsplan". profil.at. Retrieved 2015-09-20.
  6. ↑ "Baumax-Verkauf fix: Obi und Supernova übernehmen das Ruder". derStandard.at/APA. 2015-08-29. Retrieved 2015-09-20.
  7. 1 2 3 4 "bauMax: Supernova bestätigt Obi-Deal" (in German). orf.at. Retrieved 30 August 2015.
  8. ↑ "BRIEF-Polish Merkury Market taking over most Baumax stores in Czech Republic". reuters.com. Retrieved 30 September 2015.
  9. ↑ "Baumax to become XXXLutz furniture stores in Hungary". bbj.hu. Retrieved 27 January 2015.
  10. ↑ "bauMax to pull out of Croatia, local unit files for insolvency". seenews.com. Retrieved 15 March 2015.
  11. ↑ "Leroy Merlin buys bauMax Romania for EUR 17 million". romania-inside.com. Retrieved 25 November 2014.
  12. ↑ "Austria's BauMax sells Bulgarian stores to investor Haedus". reuters.com. Retrieved 11 September 2014.
  13. ↑ "Austria's BauMax to close Turkish DIY stores". reuters.com. Retrieved 3 April 2014.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.