Praktiker Bau- und Heimwerkmärkte Holding AG, Kirkel

Page 8
by the kind of price-aggressiveness the Praktiker brand embodies. It also includes a new image for the
Max Bahr as well as the further development of the small store format concept “Max – the compact
DIY store”.
Procurement – new structures created
After the acquisition of Max Bahr, new structures were created for procurement. Since the middle of
2007, a central procurement unit is in charge of the purchasing activities for both brands – Praktiker
and Max Bahr. Due to the acquisition, both the number and structure of suppliers have changed to a
significant degree. The central purchasing department’s key initial task therefore involved comparing
and harmonising procurement procedures.
As a result of the acquisition, Praktiker worked with more suppliers at the end of the year than it had in
the previous year. The share of the 20 most important suppliers in terms of overall procurement volume
came to somewhat more than 30 percent, the same as in the previous year. The share of direct
imports – mostly from the People’s Republic of China – stood at just under 9 percent in 2007, slightly
up on the level of the previous year (8.3 percent). The share of private label products also rose marginally
to around 19 percent (previous year: around 17 percent).
Innovation and development – Easy-to-Shop and Max – the compact DIY store introduced
The Easy-to-Shop concept launched in 2006 proved its worth in 2007. However, in the difficult environment
of the German DIY store, the concept did not live up completely to initial expectations. Yet, on
average, the Easy-to-Shop stores recorded a significantly better sales development than the rest of
the Praktiker brand’s German store portfolio. In a declining market, that is a considerable success. As
planned, positive aspects were the significant reduction in inventories and capital requirements in the
stores. A further positive aspect was the fact that the new concept received favourable ratings in all
areas in customer surveys – the customers felt better, found the items sought more quickly and yet
still had the impression of being able to choose from a wide range of products.
In 2006, Max Bahr initiated its innovative small store format concept under the name of “Max – the
compact DIY store” in Berlin. The stores are intended to cater for local urban needs. The initial experience
gained with the 11 small-format DIY stores existing as of the end of 2007 was encouraging,
which is why the concept will be expanded in 2008 to include 24 new outlets in Berlin. The concept is
based on the idea of carrying a small range of high demand DIY items in densely populated residential
areas. Thus, the demand for items used in minor repairs can be met without customers having to
travel long distances for their purchase. Due to their compact size (on average 200 square metres),
the stores are not included in any operative statistics.