Skoringen, Zjoos and Feet Me, three Danish footwear retail chains that have been working together on purchasing, are pushing their cooperation further, turning their joint buying cooperative, Shoe-D-Vision, into a full-fledged company by the same name that will take over marketing and other functions. It should also make it more feasible to expand into Sweden, and possibly the UK. The chains already run data processing and logistics through Shoe-D-Vision.
Claus Trane, the former chief executive officer of Skoringen who has led Shoe-D-Vision for the past few years, will take on a similar role at the new company, which now wields a consolidated retail turnover for the three chains of just over 1 billion Danish kroner (€134m-$210.3m) before VAT in Denmark, and another DKK 650 million (€87.1m-$136.7m) in Norway.
Skoringen is one of the largest footwear buying groups in Scandinavia, with 134 stores in Norway and 185 in Denmark. It joined forces with another Danish voluntary group, De Grønne Skobutik, in 2002 to form Shoe-D-Vision and increase their respective buying power. De Grønne Skobutik has since been renamed as Zjoos, a name that sounds like “shoes,” and the chain now consists of 70 stores, only two of which are in Norway.
Skoringen launched the Feet Me concept in 2001, consisting of dedicated sections of the affiliated stores for trendy women’s shoes. The Feet Me brand is now used for stand-alone stores operating right next to 35 Skoringen stores in Denmark, with a connecting door. Like Zjoos, Skoringen is now shifting its focus from the family to trendy women, but Zjoos will concentrate on smaller urban areas, giving retail members a more differentiated range of alternatives to choose from for their investments.
Retailers affiliated with the three banners hold a 35 percent market share of the Danish specialty shoe retail market, or about 20 percent of the total market, estimated at DKK 4.8 billion (€643m-$1,000m) a year, and are also very present in Norway. In order to become a major player in the Scandinavian region, the new group intends to increase the number of stores rapidly and encourage the introduction of its concepts to the Swedish market within the next few years, probably through the acquisition of a small chain there.
The Skoringen division accounts for almost half of the merged company, with turnover that grew by 21 percent in 2007 to DKK 756 million (€101.3m-$159m), including VAT. While net profits for the central wholesale division doubled to DKK 14.7 million (€1.9m-$3.0m), the retailers belonging to Skoringen enjoyed profit margins estimated at 6 percent of sales.
These profits will help Skoringen retailers to re-invest the DKK 300 million (€40m-$63m) necessary for redesigning their outlets according to a more fashion-oriented concept, with a strong focus on female consumers. The company estimates that the average Danish woman buys five pairs of shoes per year, while men only purchase only half as much.