At the beginning of this week, Prima announced that it would close its furniture showroom in Westgate, a shopping center at the western entrance to Zagreb, the most likely main reason being the disastrous combination of high rent and a declining number of customers. Another reason for this closure is that Prima completely renovated its large showroom in Zagreb’s Jankomir a few months ago. However, even without this showroom, Prima Group will remain the largest business system for the production and sale of furniture in the region with 61 showrooms in three countries and six furniture factories in Croatia and Bosnia and Herzegovina.
It has been at least five years since the owner and director of Prima Group, Renato Radić, announced plans to open the first furniture showroom in Slovenia, which, however, was finally realized only this spring. Prima opened its first showroom in Slovenia at the end of May this year as part of the BTC City shopping center in Murska Sobota. Judging by Radić’s statement at the opening of that showroom that ‘BTC is now our strategic partner for Slovenia’, it can be expected that the next two Prima showrooms in Slovenia will be opened in Ljubljana and Novo Mesto, where BTC has its shopping centers.
Prima’s furniture showroom in Murska Sobota is the eighth that Radić’s group has opened outside Croatia. The other seven have long been established in North Macedonia. After leaving Westgate, there will still be 53 Prima furniture showrooms open in Croatia, which means that among furniture retailers, only Jysk has a more extensive retail network in our country.
The largest of the ten companies in the group is Prima Commerce, whose revenue last year amounted to almost 90 million euros, but with a relatively modest net profit of 439.5 thousand euros. In the last five years, Prima Commerce has grown by 23 percent in revenue, with the strongest growth (double-digit rates) occurring in the pandemic year of 2020 and the year after, while the least, only 3.5 percent, was last year. With a revenue of 90 million euros, Prima Commerce was the fifth largest furniture retailer in Croatia last year, far behind the leading trio – Lesnina, Fliba (Emmezeta), and Ikea, but also increasingly distant from Jysk, its immediate competitor. Just two years ago, the gap between Jysk’s and Prima’s revenues was only 14 million euros, but last year Jysk, with a revenue growth rate of over 22 percent, distanced itself from it to over 32 million euros in its favor.
It is somewhat unclear how it is that Prima’s revenues last year, when other large furniture retail chains were growing rapidly, grew so modestly, both in the domestic market and in exports, which amounted to just under five million euros, while the year before it was slightly over five million euros. Namely, its retail network is large, the sales assortment is attractive and of quality on par with the largest competitors (sometimes even above it), and there are huge investments in marketing… The only thing we can suspect is that something is amiss in Prima’s sales strategy is its pricing, which is based on the model of ‘high regular price with very high and very frequent discounts’. There is almost no product that cannot be purchased with discounts reaching up to 60 percent during frequent promotions such as ‘Kitchen Week’, ‘Attractive Promotion’, or ‘Enticing Wednesday’. Customers are not foolish and know how to take advantage of that.
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