Discount Hypermarket Retail Chain La Cocoş has added new shareholders The European Bank for Reconstruction and Development (EBRD), CEECAT Capital Fund, a regional private equity fund that works with visionary founders to support business growth, and Morphosis Capital Fund II, a growth capital fund focused on the development and transformation of local SMEs into regional players.
The three investors thus became majority shareholders in the most powerful entrepreneurial business in the local food trade, a business of about 1 billion. lei (200 million euros), founded by entrepreneurs Iulian and Gianina Nica. The money will be used for the development of the network of hypermarkets with low prices.
"As the founder of the La Cocos chain of stores, I am convinced that this association represents a tremendous opportunity to increase efficiency and accelerate the expansion of our company. After almost a decade since the opening of the first store in 2014, in Ploiesti, we realized that our expansion from local to national level requires significant financial resources. Finally, I can say that this strategic association will not only bring us an associate and an adequate financial resource, but will also bring us a valuable partner, specialized in strategies for the development and implementation of large-scale projects, having a common goal: to become the first company in the domestic food trade to exceed the threshold of 1 billion euros in sales, in 2029. Together with the La Cocos team, we would like to thank the investors for the trust they have placed in us and for joining this ambitious goal. We also thank the law firm Ţuca Zbârcea & Asociaţii for the assistance offered in this transaction", says Iulian Nica.
The entrepreneur also says that without this infusion of capital, the expansion could last about 15 years. Thus, in four years he wants to reach over 10 stores.
"We are happy to support the growth and expansion of La Cocoş in Romania together with our co-investors, Morphosis Capital and CEECAT Capital. Food retail is one of the most active sectors of interest for the EBRD, and this investment represents an excellent opportunity for the Bank to support the scaling of an innovative retail business model in an attractive market such as Romania, led by a strong and appreciated entrepreneur, Iulian Nica", says Tamas Nagy, Co-Head of EBRD Private Equity.
The company operates two hypermarkets with a discount policy in Ploiesti and one in Bucharest. The fourth unit will be inaugurated in Brasov, and the fifth in Pitesti, in the space previously occupied by a PIC hypermarket (a strong local food trade network until the previous crisis). The investment budget for the two stores is 16.5 mln. euro.
However, the ambition of entrepreneur Iulian Nica, the founder of La Cocoş, is greater, wanting a national expansion. Therefore, the money injected into the business by the EBRD, CEECAT Capital and Morphosis Capital will be used for development.
"We are excited to support La Cocoş in expanding its geographical presence in Romania. Iulian and his team have developed a unique and successful format, and with the help of our joint investment we believe that La Cocoş can become a national champion and regional leader in its sector. We are also excited to work together with Iulian and our partners at EBRD and Morphosis on this journey," said Anthony Stalker, Partner at CEECAT Capital and Chair of the Investment Advisory Committee.
The retailer La Cocoş is active in the hypermarket format and is known for its low price policy. In fact, this was also the company's main "weapon" in the fight against competition, given that the large hypermarket store format has been losing ground in recent years in favor of discount and modern proximity. To keep prices down, however, the company has invested less in design and ambience.
Moreover, the discounter focuses on a small number of products, about 11,500 SKUs, the best-selling items in each category. At the same time, the retailer offers customers several selling prices for each product, depending on the quantity purchased.
Although there are voices that say that the time of hypermarkets is over, the results of La Cocoş come to refute this theory.
"We are delighted to invest in La Cocos, a successful local entrepreneurial story, which has demonstrated its outstanding performance on the Romanian retail market. This investment, the second for Morphosis Capital Fund II, will support the rapid expansion of the La Cocoş network nationwide. Our common vision with CEECAT Capital and the EBRD is to develop a chain of stores that meets the needs of both B2B and B2C customers, and to become a reference point for consumers across the country, thus contributing to economic growth and strengthening the local economy," said Simona Gemeneanu, Partner, Morphosis Capital.
The retailer La Cocos, which operates two hypermarkets with a discount policy in Ploiesti and one in Bucharest, closed last year with sales of almost 1 billion. lei, 40% higher than in 2022. By turnover, La Cocoş is the most powerful local network in the food trade.
The accelerated advance in sales came in the case of the domestic retailer and as a result of the opening in 2023 of the third hypermarket. And the company's plans do not stop there, with five more stores budgeted by the end of 2025. The first of these will be in Brasov. The new store, which will measure 10,000 sqm, will be located in the Brintex-Brasov complex, located in the Bartolomeu district.
