Octavian Radu, RTC: We�ve relinquished all projects that would not return any profit

RTC, one of the largest retail, distribution and services in Romania, headed by businessman Octavian Radu, said it would put on hold all the projects that are expected to return null profit, thus focusing on improving efficiency.

RTC is likely to fall into red

2009 may be a challenging year for RTC, as the company saw its sales of stationery products and of Diverta store falling severely. However, the retail, distribution and fashion divisions of RTC had a constant growth pace, fueled also by the sales period.

“Whoever sees growth, except for chocolate producers, is either lying or unconscious. The sales in stationery segment fell 40%, and at Diverta they slumped 20% in the bleakest week of the year. If we were looking at the figures once in six months before, now I keep tabs on them on a weekly basis, not because of panic, but only to grasp the situation and to make some prompt decisions. For the moment, we’ve seen a constant decline in August-December interval and a fluctuation of sales since December”, said Octavian Radu.

He added that he didn’t intend to open new stores, as there was no demand in the market.

“There is no investment to wish and to be turned down by the bank, but there are no more investments I am eager to develop like I used to last year. As long as I have stores that return losses rather than profit, and I try to figure out how to shut them down, it would be meaningless to open new stores, in the current poor economic conditions”, said Radu, stressing the importance of investments in improving the efficiency, especially in times of crisis.

On the other hand, RTC had a 1% workforce fluctuation in December (nearly 50 persons), and in January, about 100 – 200 employees were laid off. For the moment, the group will put on hold all the projects for which the earning drivers look negative.

“Unfortunately good projects fall too, for example, Diverta Magazin is offers in 10,000 copies, free of charge. You can’t do things only for pleasure anymore, if you can’t afford to do. There are projects that we don’t boil over anymore, but keep them at lower heat and let them simmer”, RTC leader added.

At this moment, he continued, it is impossible to predict the future evolution of RTC business, the group already considering the likelihood of various crisis scenarios, “from Armageddon, to back in business”.

“The problem is this: will a brand withstand or not? I don’t know what changeovers we will see this year. The real important thing is to be one step ahead of the competition. I don’t know whether I will be the owner of Diverta or the director of state-owned Diverta SA at the end of this year”, Octavian Radu explained.

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