Torgeir Gulbrandsen and Johan Strovik are going to run Euro Sko Norge jointly following the retirement of Christian Hatle as managing director of the big Norwegian shoe retail cooperative after 23 years in the job. Gulbrandsen, 48, who has been with the company for 15 years, will act as managing director, responsible mainly for financial and administrative matters. Strovik, a 51-year-old executive who has been with the company for 18 years, will mainly take care of marketing and other functions, including business development and sourcing.
Euro Sko estimates that it continued to improve its market share in Norway last year to 48.6 percent from 47 percent in 2009, followed at a distance by Skoringen with 14.5 percent of the market, Garant with 9.7 percent, Nilson Group with 7.3 percent and Bianco Footwear with 5.7 percent. The Norwegian shoe market declined by 0.6 percent in 2010 to 4.3 billion Norwegian kroner (€556.3m-$793.1m), according to Euro Sko, whose retail sales rose by 2.7 percent overall to a total of NOK 2,097 million (€271.3m-$386.8m).
In the past year, the volume sold by the group went down but average selling prices increased by 6.2 percent to NOK 449 (€58-$83) per pair as customers went for higher-quality products, and the process has continued more recently. With more products sourced in Italy and Portugal, the second half went better than the first half. In general, the group sources only about 40 percent of its fall/winter collection and 20 percent of its spring/summer collection outside China. Some 64 percent of its branded products are bought in Norway.
Among the 375 stores affiliated with the group in Norway, five more than the year before, the Euro Sko franchises saw their sales go up by 3.9 percent to NOK 1,535 million (€198.6m-$283.1m) for all of 2010, while the group's two other formats, Okonomisko and DNA, had relatively flat sales of NOK 330 million (€42.7m-$60.9m) and NOK 232 million (€30.0m-$42.8m), respectively. The affiliated retailers booked an average gross margin of 52.3 percent last year, and their pre-tax profit margin improved to around 9 percent from 7.6 percent the year before.
Company officials predict that the Norwegian shoe market will likely go up this year by around 4 percent in value, in spite a drop in volume. In the first quarter of the new year, retail sales went up by 6.4 percent across the Euro Sko group, but while Euro Sko and DNA stores experienced increases of 5.7 percent and 19.9 percent, respectively, the more budget-oriented Okonomisko format suffered a 0.2 percent decline.
Having reached near-saturation in Norway, the group continues to raise its footprint in the rest of Scandinavia. Its 11 Eurowalk stores in Denmark have become profitable, but the 59 former Wedins stores bought two years ago in Sweden have not yet generated a profit, partly because of the more competitive nature of the Swedish shoe market and high store leases. Their losses have been decreases, though, and break-even results are now expected around 2013.
The remaining Wedins stores in Sweden have been renamed Euro Sko, and only 35 of them will probably be kept in the end. There were 70 Wedins stores when the company now called Venue Retail Group (see following story) sold off the whole chain. Including the remaining former Wedins stores, there a total of 93 Euro Sko shops operating now in Sweden.