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Clas Ohlson - the next Swedish export looking to conquer Britain

The hardware chain, based in a tiny Swedish village three hours from Stockholm, already has 11 UK stores but sees potential for hundreds more. Ask expat Swedes what they miss most about home and the list tends to run something like this: herring, crispbread, lingonberry jam and the Clas Ohlson catalogue.

Indeed, the DIY chain's eclectic stores, where power drills are sold alongside fishing rods and cake tins, have such a devoted fan base that thousands of shareholders make an annual pilgrimage to its AGM in the remote village of Insjön, in southern Sweden. "Some [shareholders] say it's the highlight of their year," says Klas Balkow, chief executive at the retailer, which could be described as part Argos, part Robert Dyas. With national treasure status secured at home, Clas Ohlson is now on a mission to put hardware stores back on to UK high streets, albeit with a modern twist. It has already opened 11 outlets in Britain, and sees the potential for hundreds more. "We have 120 stores across Norway, Finland and Sweden, where there is a population of 20 million – the UK has 60 million, so you can see the opportunity," says Balkow. "Nobody else offers what we do under one roof: we are a hardware store but also sell multimedia products, so we offer everything a modern family needs." The Company has made a profit every year since it was started in 1918 by an enterprising bicycle repairman, who named the company after himself. In common with British institutions such as Marks & Spencer, it also has a legion of small shareholders: of Clas Ohlson's 28,000 investors, 27,000 own fewer than 1,000 shares.

With shelves full of DIY paraphernalia, the stores are a magnet for men with time on their hands. In Sweden, they are jokingly referred to as gubbdagis, or men's creches. It is two years since the first Clas Ohlson opened in the UK. Balkow concedes that although his British stores attract more customers than branches in Sweden, the visits deliver fewer – and lower-value – transactions. The company is now scaling back expansion plans from up to 10 stores a year to a maximum of six, but Balkow denies it is feeling the heat as consumer spending falters. "There's no panic," he says. "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." A UK website will be launched in the second half of this year.

With profits under pressure at homegrown British chains such as Argos, Dixons and Comet, as supermarkets target non-food sales, some experts question Clas Ohlson's chances of success in what is one of the world's most competitive retail markets. But Balkow says that the company is not an innocent abroad: "There is the same kind of non-food available in supermarkets in the Nordics but consumers still value Clas Ohlson."

Source : Zoe Wood - The Guardian

07 February 2011
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