toom BauMarkt Becomes the New Number Three in the German DIY Sector

Cologne, 16.05.07

Acquisition of 133 Marktkauf stores - Rapid integration into the successful toom BauMarkt concept

Cologne-based REWE Group has acquired 133 stores from the Marktkauf subsidiary of EDEKA in Bielefeld. The acquisition makes toom BauMarkt, the specialist store subsidiary of REWE Group, into the new number three in the German DIY business with 385 locations. The net retail turnover of toom BauMarkt of 1.3 billion euros (2006) will increase to over two billion euros thanks to the transaction. The corresponding contracts were signed in Cologne on Wednesday, May 16, 2007. The acquisition is subject to review by the cartel authorities. After official approval, the Marktkauf DIY stores, which achieved a net turnover of around 760 million euros with nearly 5,200 employees in 2006, will be integrated into the store and partnership system of toom BauMarkt. A non-disclosure agreement was signed for the details of the purchase price and other acquisition specifics.

"There are only very few opportunities in the German DIY sector to expand faster than the competition by acquiring such a large number of future-ready locations. The new locations fit well into our portfolio with their sales floors of around 6,500 square metres on average, and they complement our store base ideally. Since toom BauMarkt began its conceptual reorientation, we have experienced marked acceleration. Now we are getting an extra boost," said Josef Sanktjohanser, in charge of toom BauMarkt, among other things, on the REWE Group Management Board. "The Marktkauf stores represent a future-ready package that we have placed in the hands of REWE Group and that is not part of our core business," said Alfons Frenk, CEO of EDEKA AG, in commenting the strategic decision.

"After rapid rebranding and modernisation, the new locations will make a positive contribution to our results by 2010 at the latest," said Sanktjohanser. The acquired stores would also benefit from the co-operation with I & M Interbaustoff and the European purchasing platform toomaxx, thereby providing much better conditions for facing tight competition.

The optimum sales and operator concept would be determined for each site over the next few weeks. In the hard-fought German DIY store sector, toom BauMarkt is known for its innovative WOW store concept and its ZACK discount DIY stores. Its targeted privatisation model also offers special future options and a starting point for entrepreneurial independence to many individuals.

In past years, toom BauMarkt has often shown how well it succeeds at integrating acquired stores. For each of the years from 1997 to 1999, the chain acquired Klee Gartencenter gardening stores, Götzen DIY stores, and finally Stinnes DIY in succession.

WOW Stores Offer DIY Ideas, Service, and Consulting Expertise

Toom BauMarkt has repositioned its brand as a trendsetter in the German DIY sector by expanding its focus to cover the growing target groups of women and occasional do-it-yourselfers in addition to handymen and skilled tradesmen. The concept combines the classic DIY offerings with simple design ideas with the services and consulting expertise of trade contractors and interior designers. Core elements of the new concept were implemented as early as autumn of last year. The 28 Zack discount DIY stores aim their stream-lined basic product range primarily at price-conscious do-it-yourselfers. These stores offer particularly good value for the money by minimising service elements such as wood cutting or customer advice. The first Zack store opened in Wuppertal in 1999.

With 252 stores, 9,600 employees, and a net turnover of 1.3 billion euros, toom is already among the leaders on the German DIY market. The specialist store chain is part of REWE Group. The Cologne-based group is the third-largest food trading company in Europe with a turnover of 43.5 billion euros and 270,000 employees in 14 countries.

- A list of the acquired Marktkauf stores is available as a PDF download.

- Press photos for download.

Contact

REWE GROUP-Corporate Communications
Tel.: 0221 - 149-1050
E-Mail: presse(at)rewe-group.com

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