Retailer Spotlight: Clas Ohlson
Published: 22 December, 2009
This autumn has seen a spate of store openings for the Swedish homewares chain Clas Ohlson which has more than doubled its UK portfolio in a matter of months. And it is now poised for a nationwide roll-out beginning in 2010.
Clas Ohlson brands itself as the ‘usefulshopp’ and has been described as a town centre IKEA. But its product range takes in homewares, small electricals, DIY equipment, sporting goods and camping and leisure gear. This means its rivals range from Wilkinson and Currys Digital to Blacks and Halfords.
The stores, typically around the 20,000 sq ft mark, are well-organised and easy to navigate despite being crammed with goods.
The brand was established in Sweden as long ago as 1918, originally as a mail-order business, but today it controls a retail chain with over 110 stores in four countries: Sweden, Norway, Finland and the UK. These generate sales of SEK 5bn and employ 3,000 people.
The brand broke out of its Scandinavian stronghold last autumn when it opened a 20,000-sq ft two-level store in the Whitgift Centre, Croydon, and this was followed in spring this year with a 25,000-sq ft store in Arndale Manchester.
After a six-month lull during which time the company satisfied itself that its store format and marketing were appropriate for the UK audience, it has now pressed the button on a full UK rollout.
In November 2009 it opened a 20,000-sq ft branch in Broad Street, Reading and a similar-sized outlet in the former Woolworths site in Market Place, Kingston-upon-Thames. And this month it has opened in the Harlequin shopping centre in central Watford. The first acquisition for 2010 has been signed in Land Securities’ Clayton Square shopping centre in Liverpool. The retail space will amount to 18,000 sq ft and the new store is scheduled to open in April 2010.
Clas Ohlson plans to open 15 to 20 new stores during the 2009/2010 financial year, of which between four and eight will be in the UK. With currently 114 stores and 13 contracted stores, Clas Ohlson will have a total of 127 stores, of which 59 will be in Sweden, 46 in Norway, 16 in Finland and six in the UK.
Overall, the company aims to grow sales at an average of 15 per cent pa, and even in a worldwide recession it is beating this target: in the year to November 2009 sales increased by 20 per cent year-on-year.
And chief executive Klas Balkow pointed out that profitability was growing even faster: “Clas Ohlson’s autumn and winter range received a positive response from our customers and we continue to attract additional customers,” he said. “Work on improving the company’s productivity has continued to generate clear effects and our operating profit increased by 26 per cent compared with the year-earlier period.”
And he added: “Our expansion in the UK continued with three new stores opening in the London area in November and December. We are focusing intently on contracting attractive store locations and building a strong, long-term market position for Clas Ohlson in the UK.
“British consumers have shown a keen interest and are positive toward our product range, prices and service level,” he said.
However he warned shareholders: “Clas Ohlson expects that it will take significantly longer for a new store in the UK to reach the break-even point, given the higher rental and marketing costs necessary, compared with opening a new store in the established markets in the Nordic region.”
Jones Lang LaSalle is property advisor to Clas Ohlson in the UK.
