A Merger of Equals
In October 2017, GPEF III completed the investment into a significant minority position in HP Tronic / Datart Group. The funds were used to finance the combination of HP TRONIC and DATART.
Prior to the investment both HP TRONIC and DATART INTERNATIONAL were leading multichannel retailers with more than 25-year long history of consumer electronics, home appliances, computers and mobile phones in the Czech Republic and Slovakia. The former had turnover over CZK 9bn, 120 retail stores, 3 storage facilities, 5 e-shops and 1,400 employees and HQ based in Zlin. The latter had turnover ca CZK 6bn, 49 stores, 6 Datart kitchen studios, 2 e-shops and 1200 employees, with HQ located in Prague.
The investment idea has been creating a clear No. 1 consumer electronic retailer with 15% market share and over 160 retail stores in the fragmented Czech and Slovak markets and utilize significant cost synergies predominantly in marketing, logistic & infrastructure and purchasing power.
During the early stage of investment period, the challenging consolidation process has immediately started, led by seasoned CEO of HP Tronic Daniel Večeřa. The execution of two operational and corporate mergers both in the Czech Republic and Slovakia included integration of all internal processes, mainly in the area of logistics, IT, HR, customer service, purchasing and marketing, including a process of full rebranding of Euronics stores to the unifying Datart brand. As one of key consolidation highlights, a new logistic hall of up to 30,000 sqm of warehousing space and state of the art semi-automated logistics system (enabling delivery effectively within 24 hours from the order placement) was launched in Prologis Park Praha Jirny during pre-Christmas season in 2018.
The DATART Group managed to cope very well with the challenging period of the covid-19 pandemic, associated with the closure of stores in 2020 and 2021. The decline in sales from stores was fully compensated by the increased performance of the e-commerce channel. Point of sales were strengthened, warehouse space was expanded along with further investments into automation to speed up the dispatch of ordered goods. All of this has led to the improved customer services, the achievement of all-time high revenues, and the growth in market share to a record high.