Poundland, Hexham (19 Nov 2011)

Poundland opened the doors of its new Hexham store last Thursday (17 November) – and I understand that another Northumberland Poundland will be opening in Ashington soon.

The new Hexham store was having a ‘family fun day’ when I visited on Saturday, with the result that every child in Hexham town centre seemed to be carrying a Poundland balloon.

Looking beyond the initial razzmattazz, I suspect that the store will still do very well. It’s very visible, carries a good range in a decent-sized space, and lacks much in the way of competition. Though Hexham has a well-stocked but careworn Poundstretcher, the town is relatively unusual for the North East in having neither Wilkinson nor Home Bargains.

Poundland, Hexham (19 Nov 2011)

Meanwhile, having only had one Northumberland store (in Cramlington) prior to Hexham’s opening last week, Poundland is set to quickly add a third. I understand that the retailer has taken over the old Ethel Austin premises in Ashington, with contractors already on site and jobs being advertised. Given the quick turnaround in Hexham, we can surely expect the Ashington store to be opening well before Christmas.

Coming hot on the heels of recent new stores in Peterlee (in the former Woolworths – which I obviously need to visit!), Bishop Auckland (another ex-Ethel Austin) and Durham’s Arnison Retail Centre (previously Bensons for Beds and Ponden Home), Poundland’s expansion in the North East certainly shows no sign of letting up just yet.

With a UK store count now at more than 360 and rising, Poundland’s estate has increased by an astonishing 200 shops in the last three years. However, there must surely become a point – in just a few years’ time at the current rate of expansion – where Poundland has stores in almost all the places where it wants them.

Little wonder then that Poundland has recently launched a new fascia, Dealz, that it can potentially roll out across the eurozone, starting in Ireland. It’s a canny move that should ensure Poundland’s continued expansion, even once its domestic market is saturated.

Best Buy, Rotherham (3 Nov 2011)

Carphone Warehouse has this morning confirmed that it will close its 11 big-box Best Buy stores across the UK, subject to employee representative consultation, putting 1,100 jobs at risk.

The first store, in Thurrock, only opened – to great fanfare – in April last year, followed by others in Bristol, Croydon, Derby, Enfield, Hayes, Liverpool, Nottingham, Rotherham, Southampton and Wolverhampton.

However, the electronics and electricals chain – a joint venture between Carphone and the successful US retailer Best Buy – has racked up eye-watering losses in the subsequent eighteen months. Having made an operating loss of £62m in the year to 31 March 2011, the pace of those losses has worsened during 2011, with a further deficit of £47m reported in the six months to 30 September. Ambitions to build a 200-strong chain soon seemed wide of the mark, and the collapse, at the end of last year, of talks to open a store here in Gateshead (on the current Mothercare World site at Team Valley Retail World) suggested that any plans for growing beyond 11 sites had stalled.

Mothercare World - and once-mooted Best Buy site - at Team Valley, Gateshead (31 Dec 2010)

Clearly, Carphone decided it was better to pull the plug now than to persevere further, despite the fact that closing the stores will not be cheap – the retailer’s announcement anticipates “further operating losses of approximately £25m-£30m through to closure”, as well as “cash costs of closure [of] a further £65-75m post-tax” and “non-cash asset write downs [of] approximately £40m-£45m.”

Best Buy, Rotherham (3 Nov 2011)

So, what went wrong? Arguably, things got off to a bad start with the dithering that followed the initial Best Buy UK announcement in May 2008. Though the first Best Buy stores were originally planned for 2009, the eventual two-year build-up to market entry, in April 2010, allowed the UK’s established electronics and electricals players – notably Currys and PC World, owned by Dixons Retail, and to a lesser extent Kesa-owned Comet – to steal a march on the newcomer with significant investment in their own stores and branding.

Currys and PC World, Northumberland Street, Newcastle (6 Aug 2010)

Though Comet has itself struggled of late, Dixons’ transformation of PC World and Currys has been generally more successful, revamping the tired look of its brands, opening dual-branded stores and larger-footprint Currys Megastores, and seeking to transform perceptions of the business through innovations such as the design-led Black store in Birmingham. The pre-emptive responses of Best Buy’s competitors-to-be, coupled with other challenges within the electricals trading environment (growth of online retail, depressed consumer spending), meant that the market that Best Buy entered in 2010 was rather different to the one it had envisaged in 2008.

Currys PC World Black, Birmingham (19 Aug 2011)

Coincidentally, I visited my first Best Buy store, on Rotherham’s Parkgate Retail Park, last week, where the retailer has only been open since 10 June this year. At the time, I tweeted that “Best Buy in Rotherham is vast, beautiful, yet strangely sterile. Some customers, but seems quiet overall.” There’s no disputing that it was a good-looking store, but it was hard to work out why a customer might head there instead of to the more familiar – and recently opened – 52,000 sq ft Currys PC World megastore nearby.

Best Buy bus, Malmesbury (21 Sep 2011). Photograph by Mark Leaver

Best Buy’s UK fate is neatly encapsulated by the photo that Mark Leaver captured for me in September, where he spotted a Best Buy bus parked on a deserted roundabout near Malmesbury in Wiltshire, 30 miles from the nearest store at Bristol’s Cribbs Causeway.

Ultimately, through its own missteps and the changing climate around it, Best Buy has struggled to define its place in the market, or to find where its customers were. Malmesbury’s double decker may have shouted about the store’s presence, but sadly there just weren’t enough people who wanted to go along for the ride.

Amar Atelier, Moraira (17 Jun 2011). Photograph courtesy of Amar Atelier

Many of you will have seen my retail column in the Bdaily last week, where I discussed some of the key ingredients that help to make a successful independent retailer. One of those ingredients is the outside of your shop – and making a great first impression through eyecatching window displays and good-quality signage.

The examples I cited in my article – Who-ray! and Chocs Away – were both in Stockton, and winners in the borough’s inaugural Town Centre Business Awards. However, I was pleased to hear from my friend, Jennifer Mullan, about a North East-influenced indie retailer that’s in a rather more far-flung location – Moraira, on Spain’s Costa Blanca.

Based in Whitley Bay, Jennifer runs a business called Jenius Image and Design, combining her talent as a designer of fashions and accessories with logo and graphic design work. Now, one of her logo projects has turned into an actual shop – Amar Atelier.

Amar Atelier, Moraira (15 Jun 2011). Photograph courtesy of Amar Atelier

Jennifer explained to me that Amar Atelier is a ‘lifestyle boutique’ selling gifts and homewares, and is the brainchild of Amanda Kingman, a British woman who has recently moved to Spain. Amanda had previously been selling gifts and accessories through her website, Coasting Along, and decided to branch out into high-street retail.

Sensibly, Amar Atelier seems to be capitalising upon this background to build a multichannel presence, with its website promising a ‘webshop coming soon’; managed well, this will help to build awareness of the physical store, as well as being an important sales channel in its own right.

In the meantime, the site is quite a simple affair, but it includes the core information that I flagged as crucial in my August 2009 blog about retailers’ websites: namely, the times that the shop is open; where to find it; and how to make contact. Good quality images are also effective in conveying the look and feel of the shop, and giving a flavour of the products.

Screenshot of Amar Atelier website (23 Oct 2011)

As Jennifer told me, the story behind the collaboration is an interesting one, coming about as a result of the website platform – Mr Site – upon which both the Jenius and Coasting Along sites were built:

“Amanda approached me via my website, after seeing my business and website link on the Mr Site newsletter, and asked me to do the logo for the shop. A lot of my work is done remotely, and it is possible to send the relevant files via email, so location is not limited.

“Amanda already had the name, and some rough ideas about what she wanted, so she gave me a brief including font ideas, colour schemes and photos of the empty shop.

“I took it from there and came up with some ideas. After narrowing it down to the final logo, Amanda got a local tradesman to apply the logo to the awning and the shop window. The logo also appears on swing tags, business cards and other stationery.

“As a designer it is great to see my work in an actual shop!”

Sadly, my blogging budget doesn’t stretch to visiting the Costa Blanca, but I do like the look of Amar Atelier as a shop, with its interesting products and creative merchandising. Furthermore, the visual identity that Jennifer has created for it is simple and elegant, yet slightly quirky – and completely in keeping with the store’s personality. Hopefully in time the logo will appear more prominently on the shop’s website too, to more explicitly connect the different parts of Amar Atelier’s fledgling multichannel offer.

Tesco in Eger, Hungary (15 Jul 2006)

Today’s release of fairly weak UK trading figures from Tesco – where like-for-like sales, excluding petrol and VAT, fell by 0.5% in the first half of the year – has unsurprisingly prompted much media discussion, both about Tesco specifically and the state of the UK economy more generally.

Tesco’s coverage hasn’t been helped by rival grocer Sainsbury’s revealing that its own like-for-like sales, excluding petrol but not VAT, rose by 1.9% in the first six months of the financial year (a measure for which the equivalent at Tesco was a 0.5% rise).

As new Tesco boss Philip Clarke noted, there’s no doubt that retailers across the spectrum are having to eke every penny of spend out of cautious shoppers at the moment, with further gloomy figures on household consumption released today. The big question, however, is why the UK performance of Tesco – a retailer that has long been the behemoth of the British supermarket sector – is seemingly lagging behind that of major rivals such as Sainsbury’s.

Tesco Express, Lyme Regis (4 Sep 2011)

Before trying to answer that question, it’s worth reminding ourselves that Tesco as a whole remains a phenomenally successful business. Today’s figures showed that the company made a profit of £1.9bn in the first half of the year, on group sales of £35.5bn – a performance that most retailers can only dream of. Tesco’s store estate comprises more than 5,300 shops – half of those overseas – and it is now the third biggest retailer in the world, with a strong presence in Ireland, eastern Europe, Asia and the US. And for all that its UK performance is below par, Tesco’s market share remains more than that of Asda and Morrisons combined – thanks in no small part to the efforts of its 200,000 UK staff. As a homegrown international success story, Tesco has given the UK much to be proud of.

Tesco in Košice, Slovakia (2 Sep 2008)

However, it’s the business’s very immensity that also contributes to some of its present challenges. The perception that Tesco is simply too big – and too powerful – is widely held, not least here in the North East where it owns much of Gateshead town centre and holds the key to the centre’s long-awaited regeneration. There are clearly some shoppers who refuse to shop at Tesco for that reason.

In the UK, a significant chunk of Tesco’s growth in recent years has been built on expansion in non-food. This served the business well in the good times, but has arguably left it more exposed than its rivals now that discretionary spend is under pressure. There is also, I would suggest, some sense that Tesco’s expansion into new categories – whether that’s non-food, banking or used cars – has allowed others, such as Waitrose and the hard discounters, to up their game and become the innovators in the core grocery business.

Tesco-owned One Stop, Crewkerne (10 Sep 2011)

I touched upon some of Tesco’s challenges in grocery when I recently blogged about the Asda Price Guarantee, and Tesco, like Asda, is having to fend off rivals at both the premium and value ends of the market. For all its investment in price – including the eyecatching Price Drop campaign announced last month – my reckoning is that Tesco still faces an uphill struggle to be perceived as cheaper than Aldi, Lidl or even Asda. The proliferation of higher-priced Tesco Express stores – and the growth of the supposedly even dearer One Stop ‘stealth fascia’ – surely don’t help this perception. In contrast, Asda’s clear message about charging the same prices in its smaller stores as in the larger ones helps to cement its own value credentials.

What about quality? Here too, Tesco arguably has work to do. Just among my own circles of friends, I often hear perceptions of Morrisons being better than Tesco in fresh produce; Sainsbury’s as being a more ‘upmarket’ shop in general; and Waitrose – still a relatively recent entrant to ‘the North’ – as excelling in speciality products and treats. In contrast, Tesco’s dalliance with being ‘Britain’s biggest discounter’ and its recent launch of ‘venture brands’ – its own in-house products, but without a Tesco branding – overlaid with the familiar Value, mid-tier and Finest ranges, arguably create a confused picture of what Tesco stands for.

One of Tesco's discount brands

The one area where Tesco beats all its rivals is its long-established loyalty scheme, Tesco Clubcard. Reportedly boasting 15 million active cardholders, Clubcard provides the retailer with an unrivalled snapshot of UK consumers’ shopping habits, as well as a means of communicating targeted news and offers to its customers. Given the importance of Clubcard, the decision last week to scrap the Double Points promotion – and invest the money saved in immediate Price Drop reductions – is a bold if risky one. Tesco’s reckoning, perhaps, is that investing in loyalty is only worthwhile if shoppers are actually loyal – and don’t go off to Aldi, Lidl, Morrisons or Waitrose instead.

Back in the days when Prunella Scales’ Dotty was the face of Tesco’s TV advertising, there was a warmth and clarity about the Tesco brand – and even an affection for it – that has got rather lost in the intervening years. Today, Tesco’s rather cold and soulless stores seem like a metaphor for the brand.

Whether the recently announced initiatives will clarify what Tesco stands for – and win back those customers who have started to establish new shopping habits elsewhere – remains to be seen. However, given Tesco’s deep pockets, immense experience as a retailer, and past record of success, only a brave observer would write off its present efforts to bring the UK business back on track.

Clas Ohlson billboard, Gateshead (8 Aug 2011)

Everything seems to be gearing up nicely for the opening of Newcastle’s Clas Ohlson store, just two weeks today on Wednesday 24 August.

The Northumberland Street store’s hanging signage (below) has now been in place for a week or two, and there seems to be a big marketing push going on to build local awareness of the Clas Ohlson brand.

Hanging signage at new Clas Ohlson store, Newcastle (8 Aug 2011)

Out and about on Monday, I spotted at least two billboards (in Gateshead) and posters at various Metro stations, including Jarrow, below. Under the tagline “Prepare to have a new favourite shop”, the posters emphasise Clas Ohlson’s range of “practical products” as well as celebrating the retailer’s Scandinavian heritage.

Clas Ohlson poster on Metro (8 Aug 2011)

As a relatively new entrant to the UK market – Newcastle is its twelfth store – Clas Ohlson’s need to raise awareness and understanding of its brand mirrors the position of the US electronics giant, Best Buy, which currently has 11 UK sites.

When I’ve mentioned Clas Ohlson’s arrival to people I know here in the North East, most have never heard of the chain; however, with the nearest store currently in Leeds, that’s hardly surprising.

While the hoardings around the site have been prominently plugging the store’s imminent opening for the last couple of months, there’s clearly a job to do in telling Newcastle shoppers about what Clas Ohlson is – especially as the store’s lower-ground-floor location (previously occupied by Collectables) will make it more challenging than usual to attract unknowing people in off the street.

Best Buy recently began a nationwide TV campaign on the back of launching its transactional UK website late last year, and this activity has potential to drive multichannel traffic, encouraging visits to the online store, big-box locations or both.

Clas Ohlson website (10 Aug 2011)

Clas Ohlson, similarly, has been building up its physical store presence ahead of launching its online shop, which, according to its website, is set to go live early next year. Being able to reach customers anywhere in the UK will be a critical stage in Clas Ohlson’s penetration of the British market, and, like with Best Buy, will make it worthwhile marketing the brand at a national as well as a local level. The hope will be that traffic to the physical and online stores reinforces one another, as well as potentially paving the way for further high-street store openings through 2012 and 2013.

For now, Newcastle is set to be Clas Ohlson’s only UK store opening of 2011, but the launch of the online store in 2012 should ensure that shoppers elsewhere – be it Bristol, Southampton or Glasgow – are more clued up in advance should a Clas Ohlson eventually set up shop on their high street.

Welcome to Lake Bled, Slovenia (17 Jul 2011)

Coming from Tyneside, there’s little avoiding either Mike Ashley or his continually expanding Sports Direct chain.

Newcastle city centre has two large Sports Direct stores – a former Lillywhites in Eldon Square, and a former JJB in Monument Mall – while Ashley’s ownership of Newcastle United Football Club ensures that he is constantly in the news. In turn, retail and football come together in the popularly named ‘SportsDirect.com @ St. James’ Park Stadium’, which I can see right now from my office window.

Sports Direct at Newcastle's Monument Mall (14 Apr 2011)

One of the joys of overseas holidays is the opportunity to escape the familiar and enjoy some different scenery. So, arriving in Bled, in Slovenia, last month, imagine my surprise (and, I admit, an element of dismay) when one of the first things I saw was a Sports Direct billboard at the side of the main road into the resort.

Screenshot showing Sports Direct's Slovenia stores (3 Aug 2011)

Though I wasn’t aware beforehand, it turns out that Sports Direct has had a physical store presence in Slovenia since the mid-2000s, wholly owned since 2007, and currently comprising 14 stores from Koper on the coast to Murska Sobota in the Prekmurje region bordering Hungary.

Together with stores in Belgium, Luxembourg and the Netherlands, these now make up a wholly-owned estate of more than sixty Sports Direct stores outside the UK, alongside others that are run either as joint ventures or through license agreements. The company also ships to more than sixty countries via its online store at SportsDirect.com.

Hala A at BTC City, Ljubljana (26 Jul 2011)

I spotted one of the Slovenian stores in the sprawling Hala A mall that forms part of the vast BTC City out-of-town shopping complex, and it certainly appeared to be busy. The store itself, as you might expect, looks much the same as those in the UK, with its garish signage and chaotic interior.

Still, who’s to gripe at the formula when it’s consistently delivered impressive pre-tax profits for the business, including £135.5m (from sales of £1.6 bn) in the most recent year to 24 April? Giving away Joey Barton on a free transfer may not make Mike Ashley flavour of the month on Tyneside, but it’s hard to argue with Sports Direct’s recent record of success – even if it does involve giving me a surprise on holiday.

Clas Ohlson, Newcastle (6 Jun 2011)

Clas Ohlson, the Swedish hardware retailer, has confirmed that its new Newcastle store in Northumberland Street will open on Wednesday 24 August.

Recently erected hoardings around the 20,333 sq ft unit – formerly occupied by Collectables – reveal the opening date, and provide Newcastle shoppers with some background about Clas Ohlson’s 93-year history of “solving everyday practical problems.”

The site as Collectables (14 Mar 2011)

The store’s key product ranges – including home, multimedia, electrical, leisure and hardware – are also highlighted, giving passing shoppers a taste of what they can expect when the new store opens its doors.

Clas Ohlson, Newcastle (6 Jun 2011)

The shop’s fitout work is being carried out by the Midlands-based property services company DRC, whose head office is, coincidentally, located close to my old hometown of Tamworth. I had the pleasure of chatting to DRC’s Louise Bolton yesterday, who explained that the company has worked with Clas Ohlson before, completing the shopfits of the mall-based Merry Hill store and the three-storey former Zavvi unit at Liverpool’s Clayton Square.

Clas Ohlson, Merry Hill (20 Feb 2011). Photograph by Martin Jarvis

The Newcastle store’s basement location makes it one of the more challenging projects to manage, though the retention of the existing public lift and escalator – confirmed by Louise – makes things a little easier. Louise told me that all material has to be brought in and out of the site using the rear goods lift – and with the existing shopfloor being stripped down to a shell and rebuilt from scratch, that’s quite a lot of material to shift.

Nevertheless, Louise assured me that work on site – which began on 4 May, just a couple of weeks after Collectables’ closure – is all “on time and on programme”, with handover to Clas Ohlson scheduled for four to five weeks before the store’s opening date. Louise explained that a few DRC staff will remain on site until the store opens its doors, in order to deal with any adjustments to lighting or fixtures that might be required.

Though DRC will no doubt be in contention to work on future Clas Ohlson fitouts, Newcastle remains, for the moment, the only UK store scheduled to open during 2011. It will be the chain’s twelfth, and most northerly, British store since it entered the UK market in November 2008, and the first one to open since Cardiff, Doncaster and Norwich launched in quick succession in December last year.

Clas Ohlson catalogue

As I’ve noted before, Clas Ohlson’s preference for publishing total sales figures rather than like-for-likes makes it hard to unpack quite how its UK stores are performing. The latest figures (for April 2011) show that the UK stores turned over SEK 16m that month, compared to SEK 11m a year earlier – up 49% in SEK, or a healthier 62% in GBP.

Clas Ohlson from top of Briggate, Leeds (21 Jan 2011)

However, April 2010′s figures were based on just five stores (plus a couple of days’ trading from Leeds and Liverpool), whereas April 2011′s are based on 11. This suggests that while store numbers have more than doubled over the period, sales haven’t grown at quite the same rate.

In short, it seems like Clas Ohlson’s decision to slow its UK expansion is a wise one, given that there’s still some work to do in raising awareness of the Clas Ohlson brand and offer in those locations where it’s already represented. Come August, it will certainly be fascinating to see what the people of Newcastle make of this new and quirky retail experience on their doorstep.

Former Woolworths (now The Original Factory Shop), Chepstow (24 Mar 2011). Photograph by Alastair Leaver

Back in February I featured a batch of readers’ ex-Woolies pics, showcasing the former stores in Warrington (now Poundland), Batley (JBM Bargains) and Beverley (Boots). For its sins, Soult’s Retail View seems to have prompted people across the country to start photographing Woolworths sites, not just in this country but also further afield. So, here’s another trio of Woolies stores for you…

First up is the ex-Woolies in the Monmouthshire market town of Chepstow, which Alastair Leaver captured while visiting there a couple of weeks ago. Like quite a few other former Woolies in Wales – such as those in Porthmadog and Caernarvon – the site has been taken over by the expanding discount department store, The Original Factory Shop. As seems to be customary for that retailer, only minimal changes have been made to the property, with the recognisable Woolies shopfront still in place.

Former Woolworths (now The Original Factory Shop), Chepstow (24 Mar 2011). Photograph by Alastair Leaver

Just like its competitor B&M Bargains, The Original Factory Shop’s ability to reoccupy ex-Woolies sites with minimal fuss seems to work in its favour. The retailer reported a sales uplift of 23% in the six weeks preceding Christmas 2010, with a healthy like-for-likes uplift of 5%, and has plans to open another 35 stores during 2011.

In an uncertain economy, it’s hard to dispute that the retail industry is having a choppy time, with several new administrations – including Officers Club and Oddbins – in just the last week. It’s heartening, however, to see retailers such as The Original Factory Shop not just weathering the storm but really capitalising upon the opportunities left by others businesses’ weakness.

Former Woolworths (now B&M Bargains), Burton upon Trent (13 Mar 2011). Photograph by Martin Jarvis

B&M Bargains is another successful discount retailer doing just that. The 30,000 sq ft Gateshead flagship that I blogged about on April Fools Day may – for now – just be a flight of fancy, but I’ve regularly written about, and commended, the retailer’s ability to transform old Woolies into B&M stores in just a matter of days.

As I wrote in February, the old Burton upon Trent Woolworths, in the Coopers Square shopping centre, is one such location that B&M has recently taken over, with its new store opening there last month. Regular Midlands contributor Martin Jarvis kindly braved Coopers Square security to snap these shots of the busy B&M store.

Former Woolworths (now B&M Bargains), Burton upon Trent (13 Mar 2011). Photograph by Martin Jarvis

Expanding from 67 stores in mid-2008 to 197 two years later, B&M’s recent growth has been remarkable, much of it the result of snapping up former Woolies sites. However, as the stock of suitable ex-Woolies locations shrinks to a trickle, B&M’s presence on both high streets and retail parks gives it plenty of options – scope to continue expanding organically, while also making the occasional acquisition, such as last year’s Opus Homewares.

As in the paragraph above, I’ve had to develop quite a vocabulary for referring to the fact that Britain’s Woolworths is defunct, bringing out all the qualifiers such as ’ex’, ‘former’ and ‘collapsed’. However, the complicated history and fragmented legacy of the original, American F W Woolworth business means that there are still some places where ‘Woolworths’ stores are very much alive.

One such place is Germany, where reader Chris Exall captured a nighttime phone pic of this Woolworth-branded store, in the Bavarian town of Freising.

Woolworth, Freising, Germany (17 Jan 2011). Photograph by Chris Exall

Of course, Woolworth GmbH – the present-day chain of Woolworths stores in Germany and Austria – has nothing to do with its collapsed British namesake, though there is an element of shared history. Both are spin-offs from the American parent, the UK business having split off in 1982 and the German one as recently as 1998.

Given this heritage, its not surprising that the German business offers a vaguely familiar product mix – including stationery, homewares, toys and seasonal goods – though it also sells men’s and women’s clothing, ranges that the UK chain jettisoned back in the 1980s.

Ironically, Woolworths Germany itself filed for bankruptcy in April 2009, just a few months after the collapse of the UK chain, but the story has a happier outcome. In July last year, new investors saved the brand and around half the stores, resulting in a truncated chain of 158 ‘small department stores’, and there are ambitious plans to grow the business back up to 500 shops of between 10,000 and 20,000 sq ft each.

Germany’s Woolworths may not be quite the same Woolies as shoppers in Britain recall with such fondness. However, it’s pleasing to know that there’s at least one place in the world where high street Woolies shops not only live on, but are seen as having an exciting – and viable – future that celebrates and builds upon the business’s “proud tradition”.

Clas Ohlson, Leeds (21 Jan 2011)

Things have been pretty quiet on the Clas Ohlson front since the Swedish hardware retailer announced the latest stage of its UK expansion, back in August. Those new stores in Cardiff, Doncaster and Norwich have subsequently opened, just before Christmas, but there’s no news yet on where the next additions to Clas Ohlson’s 11-strong UK store portfolio might be.

In August, the retailer’s chief executive had suggested that the chain could grow to as many as 200 UK stores, though a statement in December indicated that its rate of expansion in Britain was being scaled back due to the “strained” UK economy. In terms of actual store openings, this meant that Clas Ohlson would be envisaging 4-6 new UK stores by the end of the current financial year, rather than the 6-10 that had originally been planned.

Window display at Clas Ohlson, Leeds (21 Jan 2011)

An article in Monday’s Guardian recycles some of this earlier commentary, but gives some positive news regarding Clas Ohlson’s long-term plans for this country. It quotes boss Klas Balkow as saying that “there’s no panic”, and that “there is a long-term commitment from myself, the board and the company’s owners. We are not rushing – we are taking it step by step and building the brand.”

Screenshot of Clas Ohlson website (9 Feb 2011)

The article indicates that “a UK website will be launched in the second half of this year” – presumably a transactional one, given that a basic site with product information already exists – but gives no clues regarding the locations or timing of the next high-street shops. However, in just the same way as US giant Best Buy is selling online in the UK at the same time as building a fledgling store estate, making the Clas Ohlson website transactional will be an important step in increasing the retailer’s UK reach, and in continuing to develop awareness of the brand.

As you’d expect, I couldn’t resist paying a visit to Clas Ohlson’s Leeds store when I was in the city last month. Occupying a prominent corner chunk of The Headrow’s Broadgate development – the building that used to house the Allders (and, before that, Lewis’s) department store – the store benefits from a fantastic, prime location at the top of Briggate, with double-height glazing that makes a bold impression on the street.

Clas Ohlson from top of Briggate, Leeds (21 Jan 2011)

Inside, the 23,142 sq ft store is spread across two floors, and feels very spacious – indeed, other than the shop in Manchester’s Arndale Centre, the Leeds store is Clas Ohlson’s largest to date. On the downside, I was less impressed by the choice of piped music (maybe it’s my age, but I don’t find rapping condusive to relaxed shopping), and the store seemed much, much quieter than it really should have been on a Friday afternoon at 5 o’clock, a full one and a half hours before closing.

Clas Ohlson, Leeds (21 Jan 2011)

Perhaps I just visited at a quiet time, as Clas Ohlson’s UK sales figures continue to be quite strong. The latest figures, for December 2010, show UK sales of SEK 42, compared to SEK 26 a year earlier. As usual, however, it’s important to understand what’s being compared with what – where December 2010 had eight stores trading for the whole month and the three new ones for only part of it, December 2009 had only four fully-open stores with a fifth (Watford) opening during the month. On this basis, and taking into account the generally smaller size of the recently opened shops, sales densities would seem to be more or less on a par with a year ago.

Going back a couple of months, Clas Ohlson announced sales of SEK 18m (about £1.64m) from its then seven UK stores during October 2010 – again, a seemingly headline-grabbing 216% increase from the SEK 6m figure recorded a year earlier, when the retailer had just two stores in this country.

While Clas Ohlson does not publish like-for-like comparisons explicitly – the reason why meaningful comparison of the numbers is difficult – we do know, as I previously blogged, that sales for June last year were SEK 15m. Given that Clas Ohlson’s UK store portfolio (seven stores) was the same in October as it was in June, October’s SEK 18m figure indicates a 20% increase in like-for-like sales over this 4-month period – a strong performance by any measure.

On the other hand, while the increase in UK sales densities – from SEK 2.1 m per store in June to nearly SEK 2.6m in October – is heading in the right direction, there’s still a way to go before the UK branches are generating as much income as their more mature equivalents in Sweden or Norway.

Still, as long as Clas Ohlson is determined to persevere with its UK ambitions, ride out the economic downturn, and make its offer available to more British shoppers, there’s every chance that its quirky ‘usefulshopps’ will become an increasingly common fixture on our high streets.

Existing Kingston store

The much-blogged-about Swedish hardware retailer Clas Ohlson published its sales figures for June yesterday.

What’s interesting is that sales for the UK are now being stripped out from those of Finland, giving us a much clearer idea of how the UK business is doing. Total sales were SEK 442m, of which the seven UK stores accounted for SEK 15m. A year ago, the UK business delivered sales of just SEK 5m, with the June 2010 figures representing a seemingly impressive 176% increase – or 203% in local currency. Sales in Clas Ohlson’s home market of Sweden, in contrast, were unchanged year on year.

The trouble, of course, of eyecatching percentage figures like these is that they are not based on like-for-likes – in other words, the year-on-year comparison takes no account of any stores that may have opened or closed in the intervening period.

To give another example, this is why, at a time when the business is expanding rapidly, the John Lewis Partnership’s trading figures – which again show only the raw increase in sales, not like-for-likes – need to be interpreted carefully. There’s no doubt that both the eponymous department store chain and Waitrose are trading well right now, with the latter’s latest weekly figures, published today, showing a 13% sales increase compared to a year ago. It’s just that once you take out the effect of new stores opened in the last 12 months, the actual sales increase in the established stores is inevitably lower than the headline figure.

Clas Ohlson fascia

Apply this to Clas Ohlson, and you realise that while the June 2010 figures are for seven stores (two of which had, admittedly, only been open for a month), the June 2009 stats are for just two (Croydon and Manchester). On this basis, the threefold increase in UK sales is just about what you would expect, especially since two of the five new stores are the smallest in the estate.

By way of an alternative measure, what happens if we look at each country’s sales figures for June 2010 in relation to the number of stores?

• For the UK, sales work out an average of SEK 2.1m for each of the seven stores.
• Finland has 16 stores and a turnover of SEK 35m – so that’s SEK 2.2m per store, a little higher than the UK.
• There are 42 stores in Norway – with total sales of SEK 182m, that’s an average of SEK 4.3m for each shop.
• The rest of the stores – 56 – are in Sweden. If total sales are SEK 210m, that works out at SEK 3.8m per store.

What does this tell us? Well, it basically confirms the trends that Clas Ohlson highlighted in its own year-end report for May 2009 to April 2010. Here, the retailer notes that “the response from customers to the newly opened stores in the UK has been positive and the number of visitors to date has been higher than the Group average”, but that “the conversion rate and average purchase in the UK have been lower than the Group average, which is generally the case in conjunction with the penetration of new markets.”

Looking forward, the report explains how “Clas Ohlson anticipates that establishing its brand name and position in a completely new market will take time, and that the conversion rate, average purchase and sales will gradually increase in coming years.”

In other words, while the sales densities for the UK stores are indeed currently lower than those of the more established Scandinavian branches, Clas Ohlson’s message is that this is just a normal part of entering a completely new market, and that they’re in it for the long haul.

As more UK stores open, and the Clas Ohlson brand becomes more widely known among British consumers, it will be interesting to see how quickly the UK sales densities can catch up with those in the retailer’s more mature markets.

The delights of Northumberland Street await the Faroese

Delighted to see from BBC News that Tyneside’s retail offer is sufficiently exciting to attract a festive shopping visit from 1,000 Faroe Islands residents!

Surely though, 24 hours isn’t nearly enough time to see everything?

Update: There’s a bit more detail about the visit in today’s Evening Chronicle.

Clas Ohlson sign

With so many old Woolworths sites being taken over by familiar high street names and pound shops, it’s nice when the new arrival is something a little more interesting. So I was pleased to read that the Swedish “modern hardware brand” Clas Ohlson is going to be opening up in the former Woolies in Kingston upon Thames, and is also looking to occupy the old Woolworths site in Reading.

If you’ve never heard of Clas Ohlson, you can be forgiven. Established by Mr Clas Ohlson in 1918, the company has grown to over 100 stores across Sweden, Norway and Finland. However, its presence in the UK goes back only to November last year, when it opened its first British store in Croydon’s Whitgift Centre (a unit previously split between Books etc. and a standalone George store), followed by a second, in Manchester’s Arndale Centre, in April.

Clas Ohlson's existing Croydon store

In the middle of a recession, some might say that it’s a brave move for any company to make its first ventures into the UK market – particularly given the fate that has recently befallen other homeware retailers such as ILVA and The Pier. To be fair though, Clas Ohlson’s positioning seems to be more as a funkier, Scandinavian twist on Wilkinson or Robert Dyas, mixed with a Lakeland-rivalling array of useful (or merely baffling) gadgets such as plastic drain cleaners, battery testers, painted Dalecarlian horses, and scrubbing gloves for root vegetables.

Certainly, Clas Ohlson’s product range is eclectic and difficult to pigeonhole, with categories such as art supplies, clocks, fishing equipment, stationery and toys sitting alongside an extensive range of household, garden, DIY and electrical products.

Cannily, Clas Ohlson’s assortment also seems to tapping into the growing trend among credit-crunch-savvy Brits for mending rather than replacing, suggesting that:

“British people are just as interested as us in the Nordic region in fixing various things in their homes. Our broad range of products that solve small, practical problems in everyday life satisfies these interests and needs.”

With only Croydon and Manchester to choose from, I haven’t yet had the opportunity to visit either of Clas Ohlson’s UK shops. However, it looks and sounds very much like the type of store in which I could happily spend some considerable time, with lots of interesting, practical items presented within a store environment that is typically Scandinavian – clean, modern, and with a distinctive and engaging personality.

During the 2009/10 financial year, the company apparently plans to open four to eight stores in the UK, which raises the question of where those additional new stores might be. Might Newcastle be on the target list?

Clas Ohlson is certainly the type of store that would bring some more interest to Newcastle city centre, and with the completion of the Eldon Square extension next spring there will be a fair amount of existing retail space being freed up. Realistically though, the city centre doesn’t have very many units available that are big enough or in the right place.

Eldon Square’s new St Andrew’s Way, anchored by Debenhams and New Look, will offer the quality, modern space that Clas Ohlson would be looking for, but seems fairly full up already^{[broken link removed]} - mostly, it must be said, with relocations from the older parts of Eldon Square (more of that, perhaps, in a future post). The premises that New Look will be freeing up (the former WHSmith store in Sidgate) are over two levels and are about the right size, but suffer from being at the gloomiest and seemingly least visited end of Eldon Square. So, no good there.

Elsewhere in the city centre, something must surely happen eventually to the wonderful former Co-op department store building in Newgate Street, particularly now that it has become a prime location directly opposite the entrance to the new Debenhams. With five floors to fill, however, it’s unlikely to suit Clas Ohlson – or any of the other big names currently missing from Newcastle, such as Zara – unless the building gets carved up between several retailers.

The empty Co-op department store in Newcastle

The unit previously occupied by The Pier in the attractive Eldon Garden shopping centre might also be an option. Across two floors, it’s probably just about big enough, and would attract those gadget-hungry shoppers who already visit the nearby Lakeland shop. On the downside, Eldon Garden’s rather peripheral location and seemingly high turnover of stores may not offer the best environment for long term success.

Rather, I would put my money on the ideal location for Clas Ohlson being the old Zavvi store in Monument Mall. As I observed in a blog post just over a year ago, Monument Mall seems to have been struggling of late, with the unfortunate, but unavoidable, loss of Zavvi following on from the departure of Boots, Benetton and JJB Sports.

With so many closures, you can perhaps excuse the floor plan on the Monument Mall website^{[broken link removed]} for suggesting that the shopping centre still houses all these shops, along with a ’Virgin Megastore’. (Seriously, though – what on earth is going on when a shopping centre’s official website features a mall guide that is two years out of date? Truly terrible PR.)

Given this backdrop, Monument Mall would surely welcome the arrival of a strong anchor store, while the three-storey Zavvi unit would give Clas Ohlson all the space it needs along with a prominent frontage on Northumberland Street, Newcastle’s prime shopping thoroughfare.

So, Clas Ohlson – how about it?

Tesco in Eger, Hungary

How about starting off with this very large (and seemingly very successful) Tesco on the outskirts of Eger in Hungary? The planners would never allow letters that big on a UK Tesco Extra.

And what about admiring the Tesco department store – spread over several floors – in Košice, Slovakia?

Tesco in Košice, Slovakia

I’ve probably got some more eastern European Tesco shots somewhere, if anyone is really interested… go on, say you are! :)