The German DIY chain Bauhaus has decided the time has come to open its Icelandic store, which has lain empty since completion in 2008.
Bauhaus sells goods for home improvement, gardening, interior design and construction, among other things. It will be in competition with many other companies when it opens in Reykjavík; but its main two competitors will undoubtedly be BYKO and Húsasmiðjan/Blómaval. The latter was recently sold to a Danish retail firm.
The German company Bauhaus has been interested in opening a branch in Iceland since 2003, mbl.is reports. Now, nine years later, the shop will finally open at Lambahagavegur on the outskirts of Reykjavík. The company is advertising for 60-80 new staff.
In an interview with the Morgunblaðið newspaper today, Bauhaus president Mads Jörgensen said that he does not expect the new store to be profitable to begin with; but that the company feels it makes more economic sense to open the outlet than to keep it closed longer, because it costs money to own the land and to maintain the building, which has been empty since 2008.
Bauhaus was attracted to Iceland by its cash wealthy populace and its strong currency (making goods from Germany seem cheaper when sold in Iceland). But Iceland’s banking crisis struck just weeks before the store was due to open – and staff had even been hired. At that point the strength of the Icelandic króna crumbled, the property market crumbled, and citizens’ disposable income also crumbled. The company therefore decided to put their project on hold.
BYKO and Húsasmiðjan have long been in the spotlight for a string of alleged cases of bad practice, including price fixing and co-operation; even years before the banking crash. Now Icelandic consumers can hope for lower prices on hardware with Húsasmiðjan in Danish hands and added competition from Bauhaus.