With consumers increasingly leaning towards the value end of retail during the current economic downturn, Scandinavian value furniture and homewares retailer Jysk has taken the bull by the horns and entered the UK market for the first time.
According to UK country manager Steve Stenhouse, a cooling retail climate is exactly what Jysk thrives in. Conditions are pretty much perfect from where the Danish owned company is sitting, and they will get even better. And, with stores in more than 30 countries already, Jysk has a reputation for being both patient and tenacious.
"Jysk is very adaptive and sensitive to local markets," says Stenhouse. "There's no secret why our formula has been so successful worldwide: we give customers a great offer, whatever the strength of the market.
"Dissect the component parts of that great offer and it's about quality, price, service and desirability, but Jysk's evolution has brought it to where it is today, perfectly built to thrive in fluctuating retail climates."
Many people in the UK will probably draw comparisons with Ikea - another successful Scandinavian furniture retailer - but Jysk's Stefan Karlsson is very optimistic about the future success of Jysk in the UK.
"It's a very competitive market," he says. "I would say Ikea is our closest rival and also price-wise, but then they operate from stores 10 times the size of ours. We are also competing against all the other UK furniture and homewares retailers and hypermarkets, but we are still the cheaper option."
Karlsson also points to customer service as a prime reason for people to shop at Jysk. "We try to be professional and offer a very good service to our customers," he says. There are currently four Jysk stores open in the UK. Lincoln and Mansfield opened in April and York and Blackburn opened in June. "We're really pleased with the performance so far," says Karlsson. "The preliminary plan was to open four stores first so we could get organised with logistics and marketing and ensure our ranges suit the UK market. As a Scandinavian company we carry a lot of Scandinavian lines which are not that different to the UK, but the UK has specific needs we must address. We're trying to find the optimal range for the company in a six-month testing period and then we'll start to roll out stores. We're looking to open 12 to 18 a year, as we have in other countries."
Karlsson says the plan is to roll out 500 stores in the UK over the next 20 years, but the starting point is the M62 corridor. "Logistics was one of the reasons for choosing this area first," he explains, "but also the demographics in that region are extremely suitable for us."
Jysk operates from an average 12,000-sq ft store and sells 50 per cent furniture, including garden furniture, and 50 per cent homewares. At the moment all of the stores are on retail parks, but Karlsson also hopes to open stand-alone stores. "We need to try hard in the UK to find our prime locations," he points out. "So far we're in retail parks. It's an easy way of doing it and fairly risk-free as well, because we have the customers there already."
As well as Ikea, comparisons have been drawn with food discounters Aldi and Lidl, both of which have proved adept at riding the crest of recession with their price-led customer proposition.
"Aldi, Lidl and Jysk all look to connect with their customers by using messages that underpin the brands as a good investment; as money well spent," says Stenhouse.
"As the wave of spending depression rises, higher price-positioned retailers tend to suffer early. They're the first to slip over the top and into the churn, as it were. Brands like Jysk, on the other hand, are adept recession 'surfers', having as they do an international trading platform that keeps them buoyant in even the stormiest conditions.
"We aren't there yet in the UK of course, naturally that will take a little time, but our global performance is strong and, as has already been noted, Jysk traditionally has plenty of patience."
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=== Statistics ===
Jysk
Number of UK stores: 4
Average store size: 12,000 sq ft
Number of countries trading: 32
Total number of stores worldwide: 3,150
Founded in: 1979, in Denmark
Company's worth: €1.9m
Net profit (2006/07): Just over 418m Danish krona (317m Danish krona in 2005/06)
UK manager: Steve Stenhouse
Website: [http://www.jysk.co.uk]
