How Kotsobolos "wins the game"

Kotsobolos, a top-rated technology, electronics, and electrical products company in Greece, presented its financial results for the fiscal year 2022-2023, which ended on April 30th. The company's turnover reached €733 million, marking a significant increase of over 12% compared to the fiscal year 2021-2022. Continuing its steady growth over the past 10 years, under the management of A. Athanasopoulos and his successor, current CEO Giannis Vasilakos.

In 2013-2014, Kotsobolos had sales of €338 million, and a decade later, it has nearly doubled in size, reflecting the company's consistent management over the past decade. This includes the management of A. Athanasopoulos from 2013 to 2018 and Giannis Vasilakos from 2018 until now. In 2018-2019, during the transition from A. Athanasopoulos to G. Vasilakos, Kotsobolos had sales of €531 million and has continued to grow every year since then.

Kotsobolos holds a leadership position in the market, and its dominance has not been questioned so far. Therefore, it came as a surprise when its parent company expressed its intention to sell it. What has been remarkable for Kotsobolos all these years is that despite being a member of a multinational company, initially Dixons and now Currys, it has always had autonomy in decision-making in Greece according to the market's needs. Of course, this is closely related to the company's good annual results over the past decade. The parent company had no reason to intervene in the strategy when the company was profitable every year.

Two significant factors have shaped Kotsobolos' successful journey in this decade: the serious and effective management, which has already been mentioned, and the clear, measured, and focused strategy.

Under Giannis Vasilakos' leadership in the past five years, Kotsobolos' management has been characterized by steady progress, absolute focus on the customer, and a priority on results. Kotsobolos has a very clear brand image that has remained unchanged, and the company's profile aligns perfectly with its management style. Since A. Athanasopoulos took over in 2013, who "took charge" of the company, followed by Giannis Vasilakos in 2018, who manages the company with substance and without unnecessary movements, Kotsobolos has had a very clear strategy that focuses on its store network as well as services beyond product sales, which have positively influenced profitability.

With good results every year in the last decade, it was surprising to see the parent company's willingness to sell Kotsobolos. However, this move does not seem to be a problem for Currys, as Kotsobolos will bring profits to the parent company, having maintained and strengthened its leading position in the market over the past decade. Kotsobolos' revenues account for approximately 20% of the total revenues of the British group, and Currys is expected to benefit significantly from the sale.

The big question now is who wants and can acquire Kotsobolos. One of the other two major players in the market, Public, which recently delisted from the Athens Stock Exchange and entered the "white goods" category in 2019, has not made any moves so far, and the price would be quite high. Of course, Kotsobolos is a case where financing through bank loans would easily be available to any potential acquirer. The other major player, Public, is still in the process of completing its merger with MediaMarkt, and under the current circumstances, it seems unlikely that it would enter discussions for a new acquisition, especially of a company with a high valuation. If it is not one of these two players, there are two possibilities: a large company from the sector outside Greece that wants to enter the Greek market, or another company, either within or outside Greece, from a different sector that sees added value or synergies.

In any case, the sales process is still in its early stages, and it will take some time to reach a conclusion. What is interesting, however, is that Kotsobolos has managed to "win the game" once again this year by following a clear and targeted strategy stemming from its stable management over the past decade. And when a company has serious management and a good strategy, it has everything it needs to achieve its goals.