Clas Ohlson plans UK expansion

Clas Ohlson, Sweden's third- largest retailer after Ikea and clothing chain H&M, is planning to open up to 200 stores in Britain, creating about 7,000 jobs.

The company, which has 115 outlets in Sweden, Norway and Finland and is listed on the OMX Nordic Exchange in Stockholm, sells hardware, electrical goods, and kitchen and bathroom accessories.

It has opened seven UK stores – in Croydon, Manchester, Leeds, Liverpool, Reading, Watford, and Kingston-on-Thames – mostly in former Woolworths and Zavvi outlets. The eighth UK store will open later this year in Dudley, with up to nine more planned in the company's current financial year.

The retailer is currently opening about 20 outlets a year across the group and intends to open UK stores alongside its Nordic opening programme until it has reached 150 in Scandinavia. Then it will focus on UK openings alone.

"We can see a tie when we would have 200 stores in the UK," said Klas Balkow, Clas Ohlson's chief executive. "We've proved in the Nordic nations that this kind of model works and we've been successful. When we look at the UK, we think there's the same need for consumers to solve many of the small practical problems in life.

"There is a gap in the UK market right now and we think there's an opportunity for us to take that position."

Like Ikea, Clas Ohlson was founded in a rural location as a mail-order company. Its eponymous founder set up the business in the tiny village of Insjon, three hours north of Stockholm, in 1918, opening a store there eight years later. It was not until 1989 that the group's second shop was opened, in a shopping centre in Stockholm.

Clas Ohlson is now the largest hardware chain in Sweden, employing 3,200 staff and distributing 6.2m mail-order catalogues worldwide.

Clas Ohlson's UK stores are all planned for the high street and city centre shopping centres, where there are few hardware chains operating large stores in the UK.

However, B&Q, which has 330 out-of-town UK stores, is considering launching stores in a smaller format than its typical 100,000 sq ft floor plan, while Robert Dyas has 100 stores across the south of England in city and town centres, ranging in size from 1,250 sq ft to 9,000 sq ft. It has recently opened new stores in high street locations.

"We believe in the UK high street," said Mr Balkow. "The night before we opened our first store in Croydon, Woolworths filed for administration.

"We got a lot of questions about why we were going into the UK at a time like that, but the opportunities are fairly large and it's easier to get sites when the market is in a

"We're well aware that few people have heard of us in the UK, so we have a journey to do but to do that we need good locations. "The UK is twice the size of our combined markets today in Sweden, Norway and Finland in population terms. For us, it is a long-term commitment and a long-term opportunity."

Source : Andrew Cave - Telegraph.co.uk