European retailers take a stake in fledgling decor dealer - Hornbach and Kingfisher invest in Dekor - Brief Article

Home Channel News, Sept 3, 2001

Interest from Kingfisher, Hornbach fuels speculation about Dekor's international intentions

ATLANTA -- Fledgling home furnishings retailer Dekor, based here, has received a financial boost from two of Europe's leading home improvement dealers. Germany-based Hornbach and United Kingdom-based Kingfisher have invested in this three-unit retailer that was started last year by former Home Depot executives.

The investment fuels speculation that Dekor may at least be looking at a potential expansion in Europe in the future. A week after the first Dekor store opened in the Buckhead area of Atlanta last November, Jim Inglis, Dekor's cofounder, told NHCN it was "highly likely" that his company's expansion strategy would eventually include markets outside the United States. Inglis gave no timetable and did not specify which countries might be suited best for Dekor's format.

In an interview on Aug. 8, Inglis declined to discuss financial commitment or any other details about the foreign investment. He also said that there were "no immediate plans" to expand Dekor outside of the United States. "Originally, all of the investment in Dekor has been provided by strategic partners that we feel have an interest in our company that is of a strategic nature," Inglis said. He declined comment on the specifics of Dekor's relationship with Kingfisher and Hornbach, although Inglis has dealt with both European DIY retailers in the past.

While at Home Depot, Inglis urged that retailer to hire Jim Hodkinson, former managing director of Kingfisher's B&Q home center chain. B&Q is part of Castorama, one of Kingfisher's core businesses, which operates 516 stores with sales of nearly US$8 billion in 2000. Inglis also has worked as a consultant for Hornbach, whose 81 stores generated nearly US$1.5 billion in sales last year.

Inglis has applied his knowledge of Europe's DIY market to add a distinct European flavor to Dekor's design and merchandising. The stores also feature a staffed Klubhouse, a European concept used by Ikea and Sodimac in Chile, where children can play with educational toys and use computer stations while their parents shop.

Kingfisher's interest in Dekor comes as Kingfisher continues to eliminate its general merchandise businesses to place a sharper focus on DIY and electricals retailing. Executives at Kingfisher and Hornbach could not be reached for comment, but it is worth noting that Castorama already has a presence in Canada -- through its ownership of Reno-Depot -- and in South America.

Dekor opened the first of four stores in the Atlanta area last November. One outlet has since closed because it did not meet the company's financial projections. A proposed expansion into Nashville, Tenn., was also postponed until next January.