BUCHAREST (Romania), May 5 (SeeNews) – Romanian online IT&C online retailer CEL.ro is in talks with several potential investors, but has not reached any agreement yet, its CEO and founder Tiberiu Pop said.
A month ago the company said it will look for a strategic investor in order to maximize the potential of the company and the market.
Candidate buyers are unlikely to go for full ownership of CEL.ro and would most likely keep its management which has the necessary know-how, CEO Tiberiu Pop told SeeNews in a recent interview.
"We are still waiting for offers on the market because I think that in assessing the prospects of an online business you must take into account the development outlook, rather than the profit it generates," Pop said.
This is one of the reasons we will not be seeing CEL.ro on the Bucharest stock exchange, he added. "An IPO would unnecessarily complicate the decision-making process and in the online business you need to make quick and often subjective decisions."
The company's first-quarter revenues were up 40% on the year. For the full 2016, Pop expects that turnover will grow 50% to 60 million euro ($68.6 million). The company reinvests all its profits in marketing.
Pop also said CEL.ro would rather wait for the launch of its new sale platform or a possible takeover of a competitor's store before it gets into a strategic partnership.
CEL.ro hopes to bring together some 500 sellers on the new platform which is due to be launched this year.
"At the moment no competitor's site does too well in terms of number of orders or cash flow. We are currently in discussion with all competing online stores, but we have not yet reached a consensus," he went on to say.
In 2012 CEL.ro took over bankrupt online IT retailers oktal.ro, and three years later it bought DC-Shop.ro. The acquisitions proved to be a good decision, Pop said, as the takeover costs and integrating expenses were low because CEL.ro only had to buy their internet domains and keep them active.
In the last years, most players on the online retail market which started off as IT retailers expanded their portfolio with beauty, food or fashion items. The general trend in the market is to sell a larger range of products to better monetize website traffic, which is usually generated with a huge marketing cost, Pop also said.
For 2016, CEL.ro plans to rent another 2000 sq m space and to interconnect with a logistics center in order to satisfy Black Friday demand.
"The IT market, except smartphones, has stalled. Expanding the range of products was the only way to keep the growth rates of at least 30%."
CEL's competitors on the market are Romanian online retailers eMag, Evomag and Domo, which closed most of its physical stores. Recently, eMag said it is taking over Romanian online IT&C retailer PC Garage. Romania's antitrust body is currently looking into the transaction.
Pop also said a decision for a possible expansion of the company's operations abroad would depend on the strategic investor. "We will probably not take this step on our own, as we lack both financial support and motivation," he added.
CEL.ro, founded in 2004, is administered by Romanian company Corsar Online.
($= 0.8744 euro)