Love
RNB
RNB RETAIL AND BRANDS ANNUAL REPORT 2006/2007 ENGLISH VERSIONAll you need is
CONTENT
RNB RETAIL AND BRANDS 2006/2007
RNB RETAIL AND BRANDS AB 5
RNB RETAIL AND BRANDS
6
2007/2007 review
8
All we need is Love President and CEO Mikael Solberg
12
Business areas and business models
14
LOVE
“Creator of the ultimate shopping trip”
DEPARTMENTS &
STORES
20
Male Depot Model for a more beautiful RNB
26
Smooth Operator A mans guide to grooming
28
ETON
The comeback
34
King of shopping
38
The perfect gift For him and for her
JC
44
The jean genies
53
Love your jeans
J-STORE
54
Who’s zooming who
BROTHERS
56
The love of the game
SISTERS
62
Silver Sister
FASHION
68
Love to Love
POLARN O. PYRET
78
The wild ones
82
Polarn O. Pyret life
84
Horse play Yardsticks for Polarn O. Pyret
CSR
86
Love sweet love
LOGISTICS
91
Love to move
BOARD OF DIRECTORS AND MANAGEMENT
94
Board of Directors and Management
RNB RETAIL AND BRANDS Annual Report 2006/2007
PUBLISHER UNDER SWEDISH LAW: Mikael Solberg
PROJECT MANAGER: Johan Tamsen
ART DIRECTOR: Martin Källqvist WRITER: Helene Murdoch assisted by Johan Tamsen PHOTOGRAPHY: Björn Loft- erud, Mats Högberg, Ewa-Marie Rundqvist, Martin Källqvist, Andreas Ackerup, Emmet Malm- ström, Sandra Petersson, Thomas Klementsson and others
FASHION: Ami Loupedis FINANCIALS: Göran Blomberg PRESIDENT AND CHIEF EXECU- TIVE OFFICER: Mikael Solberg ADVERTISEMENTS: Annika Waerner
CONCEPT: Johan Tamsen, Helene Murdoch/Vero Kommunikation and Martin Källqvist/Superlativ PRINTING AND REPRODUC- TION: Tryckeri Knappen. Karlstad, Sweden
COVER: Reine Walfridsson, Mar- keting Manager Polarn O. Pyret and Linda Danielsson, Purchaser Department & Stores
PHOTOGRAPHY: Mats Högberg STYLIST: Ami Loupedis
Love
RNB
RNB RETAIL AND BRANDS ANNUAL REPORT 2006/2007All you need is
02-03 03-04 04-05 05-06
-38,1 36,1 41,6 29,9
06-07
???3 468,3
863,4 840,1 975,5 1543.2
02-03 03-04 04-05 05-06
97 85 101 229
16 19 25 210
06-07
242214
02-03 03-04 04-05 05-06
535 489 497 721
06-07
1356
ANALYSTS
A-Brokers - Johan Widmark j.widmark@a-brokers.com ABN Amro - Carl Eckerdal carl.eckerdal@se.abnamro.com Handelsbanken - Anna-Karin Envall anol21@handelsbanken.se
Nordea - Leyla Ekekranz leyla.ekekrantz@nordea.com Proactive - Frans Høyer frans.hoyer@pi-ideas.co.uk SEB Enskilda - Elisabeth Johansson.
elisabeth.johanson@enskilda.se Öhman - Rolf Karp
rolf.karp@ohman.se Öhman - Susanna Westman susanna.westman@ohman.se
FINANCIAL OBJECTIVES
To achieve:
• an operating margin of 15% over an economic cycle
• a long-term growth rate of 10-20%
• an equity/assets ratio exceeding 30%
RNB RETAIL AND BRANDS AB 6
THIS IS RNB RETAIL AND BRANDS
RNB RETAIL AND BRANDS distributes brands using distinct, attractive brands concepts and stores whose personnel surpasses customer expectations to ensure that each brand is secured throughout the entire chain to the end- customer.
OPERATIONAL OBJECTIVE
To increase the conversion rate of paying customers from 1 in 10 to 2 in 10.
YEAR IN BRIEF
• Net sales totaled SEK 3,468.3 M (1,535.2). Sales in comparable stores increased by 7.3%.
• Operating profi t amounted to SEK 342.2 M (29.9). Profi t after fi nancial items amounted to SEK 305.8 M (20.9).
• Profi t after tax amounted to SEK 255.8 M (10.6).
• Cash fl ow from operational activities before nonrecurring items amounted to SEK 233.1 M (neg: 28.0).
On August 31, 2007, the total number of stores in RNB RETAIL AND BRANDS was 456, of which 214 were operated by franchisees
RNB RETAIL AND BRANDS is divided into two operating areas – Polarn O.
Pyret and a distribution platform for national and internal brands.
The distribution platform encompasses two business areas: Department Stores and Store Concepts. Department Stores comprises the operation of stores at NK in Stockholm and Gothenburg, Steen &
Ström in Oslo, Illum in Copenhagen and Kosta Outlet. Store Concepts includes J- Store, JC, Brothers and Sisters. Polarn O.
Pyret is a brand that focuses on baby and children’s wear.
NUMBER OF STORES
SALES AND OPERATING PROFIT FOR THE FISCAL YEAR
AVERAGE NUMBER OF EMPLOYEES
21.5% men and 78.5% women.
RNB’s average age is 32.
The average age for women is 32. The average age for men is 28.
SALES OPERATING PROFIT
PROPRIETARY STORES
RNB
2006/2007 REVIEW
VISION:
To provide “the ultimate shopping trip.”
RNB SHARE SEK
100
80
60
40
20
0
2003 2004 2005 2006 2007
OMX NORDIC EXCHANGE
FRANCHISE STORES
SEK M SEK M
NUMBER OF SHARES SOLD (THOUSANDS)
3000 4500 6000
0 1500
RNB RETAIL AND BRANDS AB 7
SIGNIFICANT
EVENTS DURING THE PERIOD
EXPANSION OF RETAIL AREA AT STEEN &
STRÖM
RNB RETAIL AND BRANDS entered into an agreement to increase its retail space at Steen & Ström by about 1,000 square meters. The increased surface area, which focuses primarily on women’s and sportswear, was put into operation in August 2007.
ACQUISITION OF NORDISK DAMKONFEKTION
RNB RETAIL AND BRANDS acquired Nordisk Damkonfektion AB, thereby ex- panding its operations at NK Stockholm by approximately 600 square meters.
OPERATIONS ESTAB- LISHED AT ILLUM DEPARTMENT STORE IN COPENHAGEN
The Department Stores business area expanded its distribution platform by establishing a store at Illum in Copen- hagen. Retail space totals approximately 2,000 square meters, divided among menswear, cosmetics, jewellery and watches. Operations were launched at the end of August 2007.
INCREASED RETAIL AREA AT KOSTA OUTLET
During the year, RNB RETAIL AND BRANDS expanded its retail area at Kosta Outlet by 2,500 square meters. Follow- ing this expansion, the company’s retail space totals 5,500 square meters.
JC’S OFFICE RELO- CATED TO RNB’S HEAD OFFICE IN STOCKHOLM
In spring 2007, RNB RETAIL AND BRANDS decided to move JC’s offi ce in Mölnlycke and co-locate these op- erations with the Group’s head offi ce in Stockholm. The move took place in June 2007.
RNB RETAIL AND
BRANDS STREAMLINES OPERATIONS – SELLS SOLO AND SAKS
During the fi scal year, RNB RETAIL AND BRANDS sold Solo and Saks to the Varner Group, whose companies in- clude Dressmann. The sale comprised a total of 16 stores and the purchase price of SEK 150 M resulted in a capital gain of approximately SEK 110 M. Takeover occurred on February 1, 2007.
POLARN O. PYRET CON- TINUES INTERNATIONAL EXPANSION
During the year, Polarn O. Pyret opened its fi rst stores in Vilnius, Lithuania, and Moscow, Russia.
RNB RETAIL AND BRANDS AB 8
In your opinion, what have been the most signifi cant events during the year?
MIKAEL SOLBERG: We devoted a lot of time and energy to establishing structure at RNB RETAIL AND BRANDS following the acquisition of JC. We also expanded our distribution platform by establishing stores at Illum in Copenhagen and increas- ing our operations at Steen & Ström in Oslo, NK in Stockholm and Gothenburg and Kosta Outlet. Moving JC’s head offi ce from Mölnlycke to the RNB RETAIL AND BRANDS offi ce in Stockholm was an im- portant step in our efforts to integrate JC into the operation. Moreover, we divested Solo and Saks as a part of the consolidation of our operations. In parallel, operating profi t increased to SEK 342 M, while cash fl ow improved by slightly more than SEK 260 M. This means that we have a strong fi nancial platform for our continued con- solidation efforts.
What is the status of the synergy gains promised from the merger with JC?
MIKAEL SOLBERG: We expect total coordi- nation gains of SEK 120 M. All indications suggest that we will be able to achieve this fi gure in 2007/2008. In the past year – the fi rst since the acquisition of JC – the coor- dination gains amounted to SEK 47 M. By combining central functions – such as pur- chasing and distribution – in Stockholm, not only can we make the organization more effi cient, we can also achieve new weight as a partner.
Will you continue at the same pace?
MIKAEL SOLBERG: We continuously eval- uate new business opportunities. Howev- er, we have grown considerably in recent years. At the same time, we have made major efforts to develop the partnership model, shorten lead times and increase the renewal rate in the stores. After fours years of hard work, we are now ready to take the next step. Ultimately, it’s all about uti- lizing the potential represented by our in- vestments. We will do this by looking after our customers in a better manner.
How will you accomplish this?
MIKAEL SOLBERG: Approximately 70 mil- lion people visit our stores every year – but of these, only 10% purchase something.
What if we could double the number of purchasing customers? This mode of think- ing formed the basis of the “love project”
that we launched in spring 2007, which aims to double the number of purchasing visitors within fi ve years. To succeed in this goal, we have had to learn to surpass customer expectations. We have learned to present and package brands and products successfully – now we intend to look after our customers and help them experience world-class shopping trip. The potential is enormous.
That sounds easier said than done…
MIKAEL SOLBERG: It’s not easy because it’s a case of fundamentally changing atti- tudes and approaches. For example, a sur-
vey at JC showed that sales staff only de- voted 48% of their working hours to sales – the rest of the time went to such tasks as receiving products, marking prices and attaching alarm devices. If a product ship- ment arrives once a week, the sales staff become occupied unpacking a mountain of products instead of looking after the customers. This is why we have changed the routines so that we receive a smaller replenishment each day, which goes faster and is easier to manage, thus freeing up the sales staff’s time so that they can look after the customers. We also have to ensure that the best sales staff are available when the customers are in the stores – during lunch hours, after 5:00 p.m. and at weekends.
However, this is only one aspect of the love project. Essentially, it’s all about en- suring that we hire the right people, pro- vide them with the right training, offer the right incentives, free up time for the sales staff and plan in the right way. As I said, the aim is to exceed customer expec- tations. And the project has just begun.
Finally – what do you consider the biggest challenges for the coming year?
MIKAEL SOLBERG: Without a doubt, transforming the love project into tangible actions – and taking more steps to give our customers “the ultimate shopping trip.”
ALL WE NEED IS LOVE
An effective business model. Strong concepts. At- tractive brands. The mechanisms are in place. All we need now is fuel – in other words, the best pos- sible customer service. The goal is to offer custom- ers world-class service and to double the number of purchasing customers within fi ve years. According to RNB’s President and Chief Executive Offi cer, the an- swer lies in more love.
MIKAEL SOLBERG
RNB RETAIL AND BRANDS AB 9
“Ultimately, it’s all about utilizing the potential represented by our investments. We will do
this by looking after our customers in a better
manner.”
RNB RETAIL AND BRANDS AB 12
RNB RETAIL AND BRANDS BUSINESS AREAS AND
BUSINESS MODELS
POLARN O. PYRET
Polarn O. Pyret is a wholly owned brand of baby and children’s wear. Operations are conducted through a combination of proprietary and franchise stores in Swe- den, as well as through a master fran- chise concept in other markets. The mas- ter franchise concept involves Polarn O.
Pyret selecting a master franchisee who receives the franchise rights for an entire country in exchange for royalty compen- sation. This concept also involves each master franchisee assuming responsibili- ty for operations in the respective market and the investments required.
To ensure continued successful interna- tionalization, high demands are placed on master franchisees regarding indus- try experience, franchise experience, knowledge of local markets and fi nancial strength. At the same time, a master fran- chisee must operate at least one Polarn O. Pyret store. Within the framework of Polarn O. Pyret’s store concept, product range and established goals, the master franchisee shall establish new stores un- der private management or through fran- chisees in accordance with an approved establishment plan.
On December 1, 2007, master franchise agreements had been concluded in Nor- way, Finland, Iceland, Estonia, Latvia,
Lithuania, Russia, England, Ireland and Scotland. RNB RETAIL AND BRANDS also operates Polarn O. Pyret under pri- vate management in Sweden and at Illum in Denmark. The goal is to have stores lo- cated in 20 countries by the end of 2010.
RNB’S DISTRIBUTION PLATFORM
The distribution platform comprises two business areas: Departments Stores and Store Concepts. Department Stores en- compasses the operation of stores at NK in Stockholm and Gothenburg, Steen &
Ström in Oslo, Illum in Copenhagen and Kosta Outlet. Store Concepts includes J-Store, JC, Brothers and Sisters.
The product range in J-Store, JC, Broth- ers and Sisters is planned, produced and purchased centrally, while distribution to the various stores takes place through a central warehouse – this is known as the
“JC model.” In this way, the companies’
collective strength is utilized in relation to manufacturers and other suppliers, si- multaneously enabling product range and fl ow of goods to be optimized throughout the season.
The Department Stores operating area is conducted according to RNB RETAIL AND BRANDS’ “partner model.” The partner model was developed to meet a
changing pattern of consumer behaviour, in which a broad product range, short lead times and store renewal are key suc- cess factors. Explained simply, the partner model involves cooperation between RNB RETAIL AND BRANDS and the brand owners, whereby RNB RETAIL AND BRANDS specializes in creating exciting store concepts with an attractive brand mix, maintaining a high level of service and selling clothes, while the brand own- ers largely decide what products will be sold in the stores, determine the “depth and breadth” of their collections and man- age the fl ow of goods between stores and cities throughout the season. The partner model also entails that the suppliers, in exchange for an increased level of respon- sibility for inventories, receive a higher margin for each garment sold, which in- creases their incentive to maximize sales in the stores, while substantially reduc- ing RNB RETAIL AND BRANDS’ tied-up capital.
The partner model has also made it possi- ble to continue developing and expanding the Department Stores operating area. To date, this has been accomplished though an increased presence at NK Stockholm and NK Gothenburg and new establish- ments at Steen & Ström in Oslo, Illum in Copenhagen and Kosta Outlet.
RNB RETAIL AND BRANDS is divided into two operating areas – Polarn O. Pyret and a distribution platform for national and international brands. Polarn O. Pyret is a brand that focuses on baby and children’s wear. The distribution platform comprises two business areas: Department Stores and Store Concepts. Department store operations are conducted through stores in NK’s department stores in Stockholm and Gothenburg, Steen & Ström in Oslo, Illum in Copenhagen and Kosta Outlet. Store Concepts includes J-Store, JC, Brothers and Sisters.
Departments & Stores
RNB RETAIL AND BRANDS AB 13
SEK M 2006/2007 2005/2006
Net sales: 973,9 816,7
AUG 2007 AUG 2006 Number of department stores 75 65
Departments & Stores Polarn O. Pyret
SEK M 2006/2007 2005/2006
Net sales: 388,4 331,4
AUG 2007 AUG 2006
Number of proprietary stores: 38 38 Number of franchise stores 45 38
Two operating areas
Polarn O. Pyret is a brand that focuses on baby and children’s wear and comprises 83 stores, of which 45 are franchise stores (Aug 2007).
The distribution platform comprises the Department Stores and Store Concepts business areas.
Department store operations are conducted through stores at NK’s department stores in Stockholm and Gothenburg, Steen & Ström in Oslo, Illum in Copenhagen and Kosta Outlet. In total, the Department Store business area comprises 76 stores. Store Concepts includes J-Store, JC, Brothers and Sisters and comprises 297 stores, of which 169 are franchise stores. At August 31, 2007, the total number of stores in RNB RETAIL AND BRANDS was 456, of which 214 are oper- ated by franchisees.
SEK M 2006/2007 2005/2006
Net sales: 2 111,1 389,4
AUG 2007 AUG 2006
Store concepts (Proprietary) 128 122 Store concepts (Franchise) 169 162 NK Stockholm, NK Gothenburg, Steen&Ström,
Illum and Kosta Outlet.
Store concepts J-Store, JC, Brothers and Sisters
CREATOR OF THE
ULTIMATE SHOPPING TRIP
RNB RETAIL AND BRANDS AB 14
LOVE
RNB RETAIL AND BRANDS AB 15
RNB’s “love project” has the potential to become at least as revolutionary for the approach to service and customer treatment as the partner model has been for the approach to cooperation within the retail trade. This is the opin-
ion of Ninni Skagerfält, HR manager at RNB RETAIL AND BRANDS and one of the coordinators of the project. The aim is to inspire and help employees give customers the ultimate shopping experience.
Large sums of money are spent on market- ing to entice customers into stores. But why is it that only one in ten of these visi- tors make a purchase? In other words, the potential is enormous.
With this in mind, the management of RNB RETAIL AND BRANDS met in spring 2007 and resolved to persuade more of these po- tential customers to shop. A new way of thinking was also required to distinguish the approach to service, in line with the same innovative thinking that already rev- olutionized the business model. The goal was to create an experience for all who en- ter RNB’s stores – to make every customer feel acknowledged and appreciated, irre- spective of whether they buy something on that particular occasion. In short, each visitor should feel a little better following a visit to an RNB RETAIL AND BRANDS store. The project was named “The Love Project.”
“Essentially, service is about loving your fellow beings – about the will to interact.
If a person smiles at another person, he or she will probably smile back,” comments Ninni Skagerfält.
LOVE IN ALL – AND TO ALL
According to Ninni Skagerfält, there was also a strong awareness within RNB RE- TAIL AND BRANDS that success would re- quire radical change, in terms of both pro- cedures and attitudes. Love must pervade all areas – from the approach to customers to how employees view each other and the company. The right conditions also had to be created for the employees; for example, by reviewing how the goods are delivered and how they appear in the store. But this was not enough; the attitude should char- acterize RNB’s entire operation – from the fi rst profi tability and market calculations for a project to how it is subsequently im- plemented in practice. The attitude cov-
ers all aspects, from selection of the com- pany’s partners to work procedures that are developed and subsequently adopted.
Moreover, it was not just RNB RETAIL AND BRANDS that would have to main- tain a high level of quality; the company also has to select suppliers with an ap- proach that ensures quality in such areas as the environment and ethics.
“We realized that the interaction between the sales staff and the customer – similar to that between a company and its stakeholders – had to be evaluated and, where necessary, changed to create the best conditions. The goal is to create a corporate culture in which this occurs automatically,” Skagerfält says.
“Unless the concept and what it represents in the company is genuinely established, it will never have any impact. It’s not just a question of outward appearance but of RNB’s soul,” she continues.
“To create the ultimate shop- ping trip for RNB’s customers, we have to create the ultimate working trip for employees”.
RNB RETAIL AND BRANDS AB 16
INSPIRATION, MOTIVATION – AND THE RIGHT CONDITIONS
Naturally, attracting the best employees is a fundamental requirement for creating the best sales force.
“This entails employing sales staff with the right attitude and who love their job, while training the sales corps – and naturally, it also involves inspiring, motivating and pro- viding them with the best conditions to do their work,” Skagerfält says.
Accordingly, one of the fi rst defi nitive measures in “the love project” was to as- semble a group of selected sales staff within RNB RETAIL AND BRANDS that would function as a sounding board and motiva- tors for the project. Among other results, these meetings inspired a review of store procedures.
“The work was based on the premise that if I, as a member of the sales staff, can and
want to sell, but must spend my time per- forming other activities, such as accepting delivery or pricing goods, the conditions must be changed,” says Ninni Skagerfält.
“The goal is to achieve a situation in which all sales staff can spend all of their time fo- cusing on the customers – and they should be on hand when the customers are in the store, including lunchtimes, after 5:00 p.m.
and at the weekends. Consequently, goods should be delivered frequently to avoid large mountains of unpacked items, and they should arrive in the morning,” she continuous.
“Lovifi cation”
In September 2007, the comprehensive work to convey these messages to the em- ployees was initiated with a kick-off for the 235 employees at RNB’s head offi ce. The goal is to “lovify” all employees in the next year through training courses and discussions.
“To create the ultimate shopping trip for RNB’s customers, we have to create the ulti- mate working trip for employees. This does not necessarily involve doing new things, but it does involve a new approach – and it is thus reassuring to have a label for this that provides support in daily work activities.
This ensures focus and clarity – and hope- fully makes it even more fun to work with customers at RNB,” says Ninni Skagerfält.
There is also a “tangible” goal for the project. In fi ve years, double the current number of people that visit the store will buy something; that is, two out of ten. The company is confi dent that the will is strong and that the message of love will yield re- sults.
RE FU SE B OR ED OM .C OM
GOSS FOTO: DAVID DENMAN
RNB RETAIL AND BRANDS AB
RNB RETAIL AND BRANDS AB 20
RNB RETAIL AND BRANDS AB 21
The original meaning of the word “groom”
is to clean and maintain appearance – usually of a horse. Maybe it was to make the concept more masculine that the term beauty treatment is used for women and grooming for men. What is certain is that not only has it become acceptable for men to assist nature’s path to improve their skin, hair and nails – it has now become an equally natural part of caring for the appearance as jogging or spending time in the gym. A clear indication of this trend is that while the industry as a whole grew by only 5% in Sweden in 2006, the male segment showed a 20% increase.
In the past, many men, watchful of their appearance, believed that if they ate well, exercised suffi ciently and kept clean, that
would be enough to look as good as pos- sible. At the same time, many women – with displeasure – noticed that their men not only had an eye on their expensive moisturizer and anti-wrinkle creams, but had also occasionally stolen a handful.
MEN INCREASINGLY COMFORTABLE CONSUMERS OF BEAUTY PRODUCTS However, such underhand activities were no longer necessary as of a few years ago.
The market had awakened and realized that money could be made from male van- ity. The majority of skincare and cosmet- ics companies now have a rapidly grow- ing offering of products aimed at men.
Moreover, an increasing number of men are comfortable with purchasing these products.
According to Roger Kylberg, a factor con- tributing to why Swedish men in particu- lar no longer avoid purchasing grooming products was because they got their own section, the Male Depot, at NK in Stock- holm a few years ago.
“From being shoved into a corner of the section for female cosmetics, where men often felt awkward, male grooming prod- ucts were given their own, centrally po- sitioned department. Here, men could not only stroll around and look at tins and bottles in peace and quiet, but could also receive expert help to fi nd the right prod- uct from the rapidly expanding offering,”
says Kylberg.
“This means that many men felt more se- cure with their purchases, and were no
MALE DEPOT
A MODEL FOR A MORE BEAUTIFUL RNB
From a stolen handful of a girlfriend’s expensive anti-wrinkle cream to regular use of personally purchased face wash, moisturizer and foundation. In just a few years, male grooming has come to the fore as the most rapidly growing segment within beauty care. And it all started a few years ago at NK in Stockholm with the then somewhat revolutionary Male Depot section – which, since then, has become a standard-bearer in the industry.
“This is a good example of how important packaging and presentation is for products and brands, and that they are overseen by the best sales staff in the industry,” says Roger Kylberg, President of the Department & Stores business area.
D EPA RT M EN TS & STO R ES
RNB RETAIL AND BRANDS AB 22
longer too embarrassed to inquire about how they could overcome such problems as dry skin,” he continues.
MALE DEPOT LEADS THE WAY
Following the success at NK in Stock- holm, the Male Depot concept has been introduced in other department stores included in RNB’s distribution platform within the Department Store area, includ- ing NK in Gothenburg and Illum in Co- penhagen. It has also been the inspiration for a similar section in Brothers – Brothers Depot – opened in September 2007 on Drottninggatan in Stockholm, a shop-in- shop concept with perfumes, skincare products and underwear for men.
“Just like the partner model, we have demonstrated that this is a platform that is not linked to a specifi c department store, retail outlet or geographic area,”
says Kylberg.
He also asserts that Male Depot’s success is a prime example of how important it is to package, present, highlight and make the products and brands visible.
“It’s important to convey a feeling of at- tainable exclusivity. The environment should attract customers and make them feel welcome, while also giving them a sense that they have been ‘chosen.’ We achieve this using modules and an impor- tant component is cooperation with the supplier. The aim is to create clarity and accessibility,” he says.
SUCCESSFUL PRESENTATION TECHNIQUE
As a result of the success of RNB’s presen- tation technique for the brands and prod- ucts, a number of prestigious internation-
al brands now contact RNB RETAIL AND BRANDS and request that their products be included in the department store sec- tions included in the company.
“In the past, we had to call and pester them, but now, they call us – this is fan- tastic,” says Kylberg, who also explains that several international brands are ex- tremely interested in a cooperation agree- ment with RNB RETAIL AND BRANDS.
RNB’s Department & store segment con- tinued to grow during the past year. At present, the business area includes 90 de- partment store sections – at NK in Stock- holm and Gothenburg, Steen & Ström in Oslo and the most recent addition, Illum in Copenhagen. This fi gure should be compared with the three sections that ex- isted in 1998. All operation of Kosta Out- let has also been amalgamated into the business area.
OPENED AT ILLUM – GROWN AT STEEN & STRÖM
Following extensive remodelling, RNB RETAIL AND BRANDS opened its new cosmetics, jewellery and watch sections at Illum in the early autumn of 2007. They comprise 1,500 square meters operated by RNB RETAIL AND BRANDS – and contain everything needed to enhance beauty.
The second phase is taking place during autumn 2007 and spring 2008, when the cosmetics section will be expanded, and the Kids section will be enlarged with, among other additions, the fi rst Polarn O.
Pyret store.
“We expect it to take time before custom- ers fi nd their way here – just as it did in Steen & Ström in Oslo, where we have
enjoyed fantastic development following a sluggish start. During the year, we also took over another fl oor at Sten & Ström, where we plan to focus on leading sports- wear brands,” he says.
According to Roger Kylberg, the focus on sportswear in Norway is a typical exam- ple of an establishment that refl ects local consumer habits – Norwegians tradition- ally wear more sport-oriented clothing.
“We must continuously identify what works in each market. It will undoubtedly be the same in Denmark. When we con- tinue to expand abroad – which we want to do in Denmark – it’s incredibly impor- tant to be receptive and fl exible with re- gard to local preferences,” he says.
Furthermore, RNB RETAIL AND BRANDS expanded its operation at NK in Stock- holm by approximately 600 square me- ters through its acquisition of NORDISK DAMKONFEKTION AB during the year.
“We have grown rapidly. Accordingly, our next step will be to manage our ex- isting holding. We must focus on service and the visiting experience, and invest in activities and events that encourage sales in the stores,” Kylberg says. “We must not forget that the reason we get out of bed every morning is to deliver our vision of
‘the ultimate shopping trip’.”
RNB RETAIL AND BRANDS AB 23 D EPA RT M EN TS & STO R ES
GU_HOMME2_DP_4000x2800.indd 1 21-03-2007 09:45:37
RNB RETAIL AND BRANDS AB 25
GU_HOMME2_DP_4000x2800.indd 1 21-03-2007 09:45:37
Photo: Björn Lofterud
SMOOTH OPERATOR
TIPS AND TRICKS FOR MALE BEAUTY
Are you one of the growing group of men who want to know more about how to care for your appearance? A few simple, defi nite pieces of advice are presented below. Read and learn.
CLEANSE – AND REHYDRATE
There are two main rules for skincare, namely, cleansing and rehydration. A mild cleanser should be used to avoid un- necessarily drying out the face. Follow- ing this, a moisturizing cream should be used that matches your skin type; that is, a lighter product for oily skin and a heavier product for dry skin. Supplement these with a high-quality shaving cream for a more effective shave.
HEALTHY COLOR ALL YEAR ROUND Too much sunbathing dries out the skin, resulting in early wrinkles. There is an- other way to have a healthy color all year round. Many brands advertise self- tanning products that are both effective and gentle on the skin. Remember to ap- ply the cream in a thin, even layer and to avoid unsightly streaks and overlaps.
THE BODY ALSO NEEDS MOISTURE Do not forget that the skin on the body also needs moisture after a shower or bath. This is also an excellent opportu- nity to apply a fragrance that will last for a long time – if you choose a body lotion with your favorite fragrance.
MANICURE
A cared-for appearance defi nitely includes well-groomed nails. This is achieved by moisturizing dry cuticles, buffi ng the nails with a nail buffer and shaping them with a nail fi le. Toenails also need to be cared for and feet must be fi led.
PLUCK MORE
Thick eyebrows are masculine – but bushy eyebrows result in a tired look and give the appearance of an old professor.
Pluck the hairs between the eyebrows. It is also important to groom under the eye-
brows and pluck long hairs that stick out.
But be careful – it is better to pluck too little than too much. Clip nasal hair at the same time.
TIPS FOR A BETTER SHAVE
If you use an electric shaver, remember that the skin should be clean and dry. If you use a blade, shave in the direction of the hair, since this reduces the risk of irri- tation and red spots. A shaving brush lifts the hairs, allowing the shaving foam to penetrate more effectively, which results in a more even and gentle shave.
INNER CARE
The skin is the body’s largest organ – and refl ects how you feel in general. Exercise, keep to a balanced diet, reduce stress, drink alcohol in moderation – and avoid smoking. Smoking is the skin’s enemy number one.
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DEPARTMENTS & STORES
Bulgari Diagono pro acqua
Persistence, passion – and Eton shirts
This is a true story of how courage, persistence and cunning transformed a brand labeled “a sad old man” into a favorite of such stars as David Beckham, George Clooney and Tom Hanks. At the beginning of the 1980s, the Swedish family busi- ness Eton was on the verge of bankruptcy with sales of about SEK 7 M and exports accounting for 7-8%. Today, sales have risen to SEK 250 M, profi t- ability is excellent and the 575,000 shirts produced every year are sold in the most exclusive stores in 38 countries. “We were innovative” is Eton Cre- ative Director Jan Borghardt’s description of the sweeping changes he and President Hans Davidson masterminded.
Photo: Björn Lofterud
Omega DeVille
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Bretling Chronomat Evolution
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Having the courage to stay true to the soul of your product, yet simultaneously being brave enough to test new ways of market- ing and sales. This is something that Jan Borghardt, the Dutchman who came to Eton and Sweden in the early 1980s and who is one of the key people behind the brand turnaround, often refers to. He could also be described as the man who totally embodies the expression “think- ing outside the box.”
But the story of Eton begins much further back. It all began as a timber trading busi- ness in Gånghester outside Borås run by David and Annie Petterson. The timber business went bankrupt in 1928, but An- nie, an enterprising and honest woman, wanted to go far in life. To earn money, she started sewing sheets. Eventually she moved on to sewing shirts and was so successful that she had to enlist the help of her neighbors to fi nish everything on time. The small family business, named Skjortfabrik Special (”Shirt Factory Spe- cial”), began exporting its high-quality shirts to the rest of Scandinavia in the 1950s.
HOW ETON BECAME ETON
Of his own accord, a bold and enterpris- ing Norwegian salesman took the shirts with him to England, where there was certainly interest in them but where no one could pronounce the name. The fam- ily deliberated long and hard, and wrote down ten names they knew in English that they thought embodied the quality of their shirts. The decision was made during a walk in the forest. The shirts and the company were to be called Eton – named after the famous English board- ing school.
Eton continued selling its shirts during the 1970s, mainly in Sweden and Scandi- navia but also with a modest export line to a few stores in London. The shirts – along with the brand – had a stamp of high quality, but also of being rather dull and old-fogeyish. Sales and revenues plodded on at the same level, while costs escalated.
The small family business’s fi nancial situ- ation became increasingly diffi cult.
That was the status of Eton when Jan Borghardt, the energetic marketer from the Netherlands, joined the company at the beginning of the 1980s.
DECIDED TO STREAMLINE
“I viewed the situation as a great challenge
and an opportunity. This was a company and a brand in crisis that was totally de- void of marketing. In other words, it was a chance to fi ll this gap with something – but the question was with what,” says Jan Borghardt.
During this period of the 1980s, many shirt manufacturers were focusing on expanding their product ranges with, for example, color-coordinated ties, handker- chiefs and scarves. Eton decided on the opposite course.
FROM GÅNGHESTER– TO HARRODS
“We decided to streamline the operations with the simple aim of becoming the best company in men’s shirts. We also decided that we would not attempt to be a fashion brand, but would position ourselves as a luxury product brand instead,” Borghardt explains.
Around the same time, Eton came into contact with a cotton manufacturer in Switzerland that produced high-quality non-iron cotton. A partnership was es- tablished. In 1988, it was time for the launch of the new non-iron Eton shirt.
Jan Borghardt considered his options for generating interest in the brand and the desired associations in the cleverest – and most inexpensive – way. What else could be more closely associated with England, boarding school, superior quality and luxury than the Harrods department store in London? So it was settled, and Jan Borghardt embarked upon a sales of- fensive targeted at this department store;
sending letters, praying and nagging. His powers of persuasion fi nally paid off – and the small shirt label from Sweden re- ceived a royal launch at this number one Mecca for luxury products.
“The response was enormous. In two weeks, we sold 600 shirts and this atten- tion spread to Sweden. Our success also gave us strength, although we realized
that a continued launch, particularly in the US market as we had planned, would require more money,” Borghardt re- counts.
USING CUNNING TO OPEN DOORS IN THE US
The capital contribution was provided by the family who remain the owners of the company today, and Eton took its fi rst, tentative step into the US market.
“Initially, we had no idea of what would work in the US market. Yet, we soon re- alized that those who could afford our shirts were also wealthy enough to have someone iron them, so the non-iron fea- ture was not a strong sales argument over there. However, after a while we discovered that something that would at- tract our target group, meaning business- men, was that our shirts stayed fresh and
smooth during a long and intense work- ing day,” he says.
In other words, the sales argument had been identifi ed. Nevertheless, Eton strug- gled with how this argument was to be communicated in the gigantic market in the West. Yet again, cunning tactics were used to open doors. Jan Borghardt had a friend in Los Angeles who was involved in AIDS issues. This friend arranged a contact with Elisabeth Taylor’s AIDS foundation, which was how it came about that Eton had special “Stop AIDS” shirts sewn for USD 1,500 each, with all pro- ceeds going to the foundation. Incidental- ly, Jan Borghardt had intended to say that the shirt cost SEK 1,500 – but he said the wrong currency…. At the Oscars in 1993, the male celebrities were competing to wear the most exclusive white shirts em- broidered with a drop of red blood.
NEW BUSINESS MODEL
After this success, Eton was commissioned to design shirts for the fi lm Philadelphia, and in the process gained Tom Hanks and
“Initially, we had no idea of what would work in the US market. Yet, we soon reali- zed that those who could afford our shirts also could afford someone to iron them, so the non-iron feature was not a strong sales argument over there.”
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others as regular customers. Sales rose and annual growth reached 25-30% – a fi gure that is the same today. At the same time, the company’s export markets in- creased, as did the number of prestigious stores and department stores wanting to sell the shirts.
“Once we felt that our survival had been assured, we had the opportunity to re- view our business model. I was deeply inspired by a speech given by Mikael Sol- berg, where he spoke about RNB’s part- ner model. We decided that we too would strive to follow this model,” explains Jan Borghardt.
Eton, which previously had a partnership with RNB RETAIL AND BRANDS through its successful store at the NK department store in Stockholm, had to release capital to build more concept stores and thus fur- ther strengthen its brand. But for this to succeed, Eton had to convince its suppli- ers to share the risk.
“We went and asked the factories that spin cotton, for example, whether they believed in us. If they said yes, we would reply that we wanted them to pay for the raw material,” says Jan Borghardt.
The experiment was a success – the sup- pliers trusted Eton, which has managed to build 190 concept stores around the world to date.
“We also marketed this partner model globally, with the most recent example be- ing the KaDeWe department store in Ber- lin that we have inspired to work with us under this principle,” says Jan Borghardt.
COOPERATION THE KEY TO SUCCESS
“Cooperation is the key to success in the industry today. It is also important to think outside the box, to discover new models. Customer habits and purchasing behaviour are completely different today
than 15 years ago, which means that we also have to be innovative in our business models.
”Our success largely results from our con- tinuously being able to think innovatively – both in terms of marketing and sales,”
says Jan Borghardt.
He cites the example of a PR coup in New York in autumn 2006, when dress shirts were sent to all male dinner guests for the Swedish-American Chamber of Com- merce’s 100th anniversary celebrations.
As many as 95% of the men, including the King of Sweden, wore an Eton shirt.
There are many examples of Eton’s inno- vative skills – and of the success of its clas- sic shirt, which is the shirt brand that has been a bestseller at Harrods for 15 years.
Jan Borghardt says that another impor- tant success factor is that Eton has dared to follow its own path for the product and has not emulated its competitors. Accord- ingly, inspiration for new colors and pat- terns does not come from current trends but from a signifi cantly broader fi eld of ideas. Jan Borghardt is currently the Crea- tive Director and, in this role, he heads a design team that produces main collec- tions and a fl ow of new models each sea- son.
When asked how the Eton brand is per- ceived today, Jan Borghardt describes a survey of young people around Stock- holm’s trend-conscious Stureplan district who were asked to name the brands that they value the most. Eton was ranked among the top three, along with the American Express platinum card. Not a bad journey for a family business from Gånghester that is still owned by descend- ents of Annie and David Petterson and has its headquarters in Sjuhäradsbygden – and for a brand that shies away from the image of a fashion brand.
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www.zegna.com
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KING OF SHOPPING
Men enjoy shopping. These are the results of a sur- vey conducted in autumn 2007 by King, the fashion magazine for men. The men polled consider Stock- holm’s NK department store to be the best store for menswear at the moment.
THE AVERAGE SWEDISH MAN’S WARDROBE CONTAINS
2.4 suits
9.6 pairs of jeans 21.5 T-shirts
13.5 pairs of shoes
HOW MUCH A SWEDISH MAN IS WILLING TO SPEND ON A...
Suit SEK 8 485 Shirt SEK 1 330 Jeans SEK 1 785 T-shirts SEK 696 Shoes SEK 2 105
A third polish
their shoes once a week, a third eve- ry month.
The rest should be ashamed!
85% consid-
er themselves to have better taste than the average man The average
value of what you are wear- ing right now SEK 3870
The average man is willing to pay SEK 18,230 for a watch
HOW OFTEN DO YOU GET YOUR HAIR CUT?
1. Once a month 35%
2. Every other month 50%
3. Once every 6 months 12%
4. Less often 2%
5. Never 1%
WHAT IS THE MOST IMPOR- TANT FACTOR WHEN YOU BUY CLOTHES
1 Appearance 2 Comfort 3 Trendiness 4 Originality 5 Right brand
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MEN’S SKILLS
Tying a tie 81%
Folding a
handkerchief 62%
Tying a bowtie 19%
Sewing a button 90%
Ironing a shirt 97%
THE MOST IMPORTANT ASPECT OF A SUIT FOR YOU
1. Fit
2. Appearance 3. Price and brand 4. Its unusualness
56% of you
are very satis- fi ed with the contents of
your wardrobe
HOW OFTEN DO YOU BUY NEW CLOTHES OR SHOES?
1. Once a week 10%
2. Every two weeks 29%
3. Once a month 46%
4. Once every three months 14%
5. Once a year 1%
THE BEST RIGHT NOW
Store: NK
Aftershave: Dior Homme
Make of watch: Omega Make of shoe: Adidas Clothing brand: Tiger
GROOMING
DO YOU USUALLY PLUCK YOUR EYEBROWS
Yes 55%
No 29%
No, but would consider it 16%
Color your hair Yes 27%
No 57%
No, but would consider it 22%
Whiten your teeth Yes 8%
No 49%
No, but would consider it 43%
Tan at the solarium Yes 37%
No 46%
No, but would consider it 17%
The King reader has 5.5 after-
shaves and
spends SEK 498 on grooming and hair cuts every month
0 20 40 60 80 100 100%
100%
39%
57%
48%
98%
88% 87%
70% 72%
68%
57%
70% 72%
67%
80%
73%
57%
21% 22%
16%
48%52%
38%
Deodorant Aftershave Men’s perfume
Moisturizer Face cream Cleanser/toner Self-tanning lotion
Peeling products 16-20 year olds 21-29 year olds 30-79 year olds WHICH OF THE FOLLOWING PRODUCTS DO YOU USE?
Its a man’s world
The perfect gift for him
BLACK
Black gloves - Tiger Smart black shoes - BOSS Watch - Breitling
Blue tie with heart - Richard James Cuffl inks - Eton
Eau de toilette - Burberry Brit for Men Soap - MOR
Photo: Björn Lofterud
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SILVER
Striped tie - Etro
Silver sneakers - Puma by Neil Barrett Eau de toilette - Prada for Men Silver-strap wristwatch - Gucci Cuffl inks - Eton
Skin care - Shiseido men Skin care - Dior Homme
... but it would be nothing without a woman
The perfect gift for her
HEAD OVER HEELS
Scarf - Fendi Shoes - Hermès
Watch with round stones - Sophie Metallic clutch purse - Furla Soap - MOR
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SHOPPING BAG
Bag - Marc by Marc Jacobs Belt - Tiger
Shawl - Hermès
Eau de Parfum - Chanel no5
Necklace with pink round stones - Sophie Gold gloves - NK Damaccessoarer
RnB_06/07_Boomerang.indd 1 07-11-02 14.29.18
THE JEAN
GENIES
JC • ADD YOUR STYLE
In 2007, JC took new actions to celebrate the personal style of its campaigns. Ordinary people – all of whom have a wonderful and personal style – were used as models. The guys and girls who work in JC stores are the models featured in the Christmas campaign. “They are the perfect symbol for JC,” says Thomas Jonasson, Head of Marketing at JC. Check out their style.
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Photo: Andreas Ackerup
/ M A R T A , J C M A L M Ö H I P - L E N G T H C A R D I G A N : O T H E R C L O T H E S : M O D E L ’ S O W N J E W E L R Y : J C
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JC • ADD YOUR STYLE
/ A L E X A N D E R , J C G Ä V L E
S H I R T : C R O C K E R M U R R A Y , S E K 4 9 9 T - S H I R T : C R O C K E R S L U B P O C K E T , S E K 2 9 9 J E A N S : W R A N G L E R S P E N C E R 0 2 0 4 1 ( M O D E L ’ S O W N )
O T H E R A C C E S S O R I E S : M O D E L ’ S O W N
/ M E R E T E , J C K A R L S T A D
J E A N S : R E P L A Y 5 5 2 0 3 0 0 7 , S E K 1 , 0 9 9 / P I A , J C E S P O O
J E A N S : W R A N G L E R , L I A 7 3 4 2 6 , S E K 7 9 9
/ M A Y A , J C Ö R E B R O
B L O U S E : E V E S A T I N B L O U S E , S E K 2 9 9 / K A R O L I N A , J C K A R L S K R O N A
B L O U S E : E V E S A T I N B L O U S E , S E K 2 9 9
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J C - A D D YO U R ST Y LE
/ S A R A , J C V E T L A N D A
K N I T T E D T U N I C : E V E A - L I N E P O C K E T , S E K 3 9 9 J E A N S : C R O C K E R 3 2 0 B L A C K , S E K 4 9 9 S C A R F & H A T : E V E , S E K 1 4 9 / S E K 9 9
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