”Every year I learn only one word in Romanian. When I got bonuses, I learnt two,” says with a smile Rand Sherif, the man who has been running the biggest business on the distribution market, Interbrands, for almost ten years now. The company, which was tenth in the ranking of the biggest private companies put together by BUSINESS Magazin in mid last year, is the only business in this field that exceeded one billion-euro sales, far ahead of the second leading distributor on the market, Top Brands Distribution, a 230 millioneuro business.

The Interbrands boss will surely not learn more than one word in Romanian in 2009, given that his company did not manage to break even last year, after having posted 0.7 million euros in losses in 2007. After all, regardless of the size of the company and of the volume of sales, most distributors posted losses in 2008, as well, after having seen their profits decrease in 2007 below 2006 levels. Rand Sherif, however, is cautiously optimistic, as he likes to say, and points out that 2008 was a good year for Interbrands, though, in which the company grew by 23% in RON (Interbrands posted 12% higher sales last year than in 2007, reaching 1.17 billion euros, but also saw its operating income halve, to around four million euros).

Although he says he anticipated the effects of the crisis, Rand Sherif admits that their extent was greater than he had expected. ”I anticipated an increase in the cost of capital but not the extent it has eventually reached. I also anticipated the depreciation of the RON, but not this low.” At the end of last year, prompted by the changes on the market, Sherif attempted to remodel the strategy, focusing on reducing the financial risk and costs. Interbrands has loans both in RON and in euros, ”a form of hedging that has both advantages and disadvantages,” Sherif says. Interbrand’s boss is now considering an increase in the loans in RON, even though their costs are higher. He says that this way the company will not feel a too powerful impact of the depreciation. The loans would not go towards investments, however, because Rand Sherif feels this is bad time for such a thing.