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Divisions Home and speciality goods trade
Kesko’s home and speciality goods trade operates in the clothing, home, leisure, home technology, entertainment and furniture product lines. The home and speciality goods trade comprises Anttila Oy, K-citymarket Oy, Intersport Finland Ltd, Indoor Group Ltd, Musta Pörssi Ltd and Kenkäkesko Ltd. The total number of home and specility goods stores is 450, of which 199 are owned by Kesko.
Kesko’s home and speciality goods trade comprises well-known store concepts with a strong position in the hypermarket, department store, speciality store and online sales. The Finnish total market of home and speciality goods is estimated to be approximately €10 billion.
The economic recession has highlighted the importance of price. Customers are looking for opportunities to save and campaigns have become more and more important. In 2009, there were differences in the market development of various product lines in the home and speciality goods trade. Consumer demand for sports goods increased, while demand for home electronics and interior decoration items in particular declined.
The estimated market of home interior decoration and furniture is €1,800 million, representing a decrease of 5–10% from the previous year.
The market for home electronics and entertainment is estimated to total some €2,000 million, representing a change of about -13%.
The estimated sports trade market totals €900 million and increased by some 5% from the previous year.
The value of the shoe trade market declined by some 3–4% from the previous year.
Since the beginning of 2009, Anttila Oy, K-citymarket Oy, Intersport Finland Ltd, Indoor Group Ltd, Musta Pörssi Ltd and Kenkäkesko Ltd have been reported in the home and speciality goods segment. During the year, Anttila, K-citymarket’s home and speciality goods and other Group’s home and speciality goods companies intensified their cooperation. The objective of the cooperation is to improve competitiveness by defining the companies’ joint strategy, developing retailing expertise on a centralised basis and ensuring that customers find the concepts interesting. Synergy benefits are sought, above all, in purchasing, in the development of the store network and through uniform, efficient business processes.
Kesko’s net sales of home and speciality goods totalled €1,558 million in 2009, a decrease of 3.0%, which can be attributed to the deteriorated financial situation and the increase in unemployment. The combined retail sales of home and speciality goods stores were €2,050 million, a decrease of 3.1%.
The operating profit of the home and speciality goods trade excluding non-recurring items was €29.5 million, representing a decrease of €1.7 million from the previous year.
Changes in the financial situation and consumption habits are strongly reflected in the home and speciality goods trade. Internationalisation and formation of chains will strengthen competition, and successful chains are based on efficient business models. Seasons and collections change faster than ever, while product series become smaller and their life cycles shorter.
The cooperation of the Kesko Group’s home and speciality goods companies started in 2009 will be further intensified.
The K-Group’s home and speciality goods trade aims to be a market leader in selected product lines. This will be achieved by enhancing store concepts and selections, by increasing the cost-efficiency of operations chains and the staff’s sales and service competence.
K-citymarket is a diversified and favourably-priced hypermarket chain, which offers its customers wide selections of groceries and home and speciality goods. K-citymarket Oy is responsible for the home and speciality goods business in these stores, while K-retailer entrepreneurs are responsible for the food business. There are 69 K-citymarkets in Finland.
K-citymarkets offer their customers up-to-date, frequently changing selections of everyday goods, quickly and at low prices. Key success factors include chain management and marketing combined with efficient, centralised purchasing and logistics. K-citymarket Oy’s operations are based on long-term strategy and systematic leveraging of customer information in operations management.
The K-citymarket chain has approximately 60 million customer visits per year and a staff of some 5,700 employees in customer service.
In 2009, the net sales of K-citymarket’s home and speciality goods totalled €595 million, which represented an increase of 5.1%. K-citymarket Oy’s retail sales amounted to €699 million.
In 2009, five new K-citymarket hypermarkets were opened: in Ylöjärvi, in
the Skanssi shopping centre, Turku, in Kirkkonummi, in Linnainmaa, Tampere, and in Koivukylä, Vantaa.
Anttila retails entertainment, fashion and home goods. The multi-channel Anttila has 29 Anttila department stores and two smaller speciality stores in Finland. The nine Kodin Ykkönen department stores for interior decoration and home goods are complemented with the Kodin1.com online store. NetAnttila is engaged in distance sales in Finland, Estonia and Latvia.
Anttila department stores provide diversified selections of leisure items, clothing and home goods combined with a low price level and friendly service. The TopTen departments are the largest retailer of music, movies and multimedia in Finland, and a major seller of information technology and electronics.
Kodin Ykkönen provides a superior selection and services for home decorators.
For several years, NetAnttila has been the best-known and most popular online department store in Finland. It offers a pioneering position, ease and reliability of shopping as well as low prices and wide selections.
Anttila’s net sales were €513 million in 2009, a decrease of 8.0%. Retail sales of Anttila department stores totalled €368 million in 2009, a decrease of 6.1%. Retail sales of Kodin Ykkönen department stores for interior decoration and home goods totalled €161.2 million, down by 10.7%. Sales of NetAnttila amounted to €97.3 million, a decrease of 14.3%, which can be attributed particularly to the drop in the Latvian market.
In 2009, a new Anttila department store was opened in the Skanssi shopping centre, Turku and a new Kodin Ykkönen department store in Lielahti, Tampere.
Intersport Finland’s retail store chains are Intersport, Budget Sport and Kesport. Intersport Finland is responsible for the marketing, sourcing and logistics services, store network and retailer resources of the chains. There are 57 Intersport stores, five Budget Sport stores and 37 Kesport stores in Finland, of which 91 are owned by retailer entrepreneurs and eight by Intersport Finland.
Intersport is part of the international sports chain. The Intersport chain is the market leader in Finnish sports retailing. Intersport’s strengths include the chain’s high reliability and recognition among customers, wide and diversified selections, and its expert and service-minded staff.
Budget Sport is a sports store format, which is based on low prices and the cost-effective business concept. It offers the sector’s largest selections in outdoor activity-related product groups.
The Kesport stores are located in smaller rural centres and are the leading sports stores in their areas.
Kesko is a partner of Intersport International Corporation.
The net sales of Intersport Finland were €165 million in 2009, representing an increase of 4.3%. The combined retail sales of Intersport, Budget Sport and Kesport stores were €305.8 million, up by 5.7%.
In 2009, new Intersport stores were opened in Ylöjärvi and in the Skanssi shopping centre, Turku. A new Budget Sport outlet was opened in Oulu, and the Budget Sport online store was launched to complement the network.
Indoor is a furniture and interior decoration retailer, which runs Asko and Sotka chains in Finland and the Baltic countries. There are a total of 83 stores in Finland, two in Latvia and seven in Estonia. In Finland, 56 of the stores are owned by Indoor, while 26 operate as a franchise.
Asko provides quality- and brand-conscious home decorators with an up-to-date and competitive product range combined with the best service in the sector, ease of purchasing and delivery accuracy.
Sotka offers consumers who value low prices with a competitive range combined with high delivery accuracy and quick and easy shopping.
Indoor’s net sales totalled €155 million in 2009, down 12.4%. The combined retail sales of the Asko and Sotka chains in Finland were €190 million, a decrease of 5.9%.
In Finland, new Asko stores were opened in Lielahti, Tampere and in Savonlinna. The Sotka stores in Mäntsälä and Valkeakoski were closed. In Riga, Latvia, the Asko and Sotka stores located in the Alfa shopping centre were closed.
Both of the chains implemented comprehensive training programmes developing sales and customer service skills of the whole staff. The chains’ cost-efficiency was enhanced and the efficiency of logistics was improved by concentrating all warehousing and terminal operations to an external operator.
The Musta Pörssi and Konebox chains provide home technology products and services.
The Musta Pörssi chain of speciality stores offers its customers home technology products that make housework easier, enhance communications and provide entertainment. In addition, Musta Pörssi offers a comprehensive range of product-related services and customers can choose to have the home technology installed so that it’s ready to use. The Musta Pörssi chain celebrated its 30th anniversary in 2009.
The chain consists of 53 stores specialising in home technology, of which 50 are owned by retailer entrepreneurs and three by Musta Pörssi Ltd.
On the home technology market, the Konebox.fi online store competes with quality products, their good availability and low prices, and round-the-clock opening. The prices are based on efficient logistics and warehousing combined with the online store’s self-service.
The net sales of Musta Pörssi Ltd were €107 million, representing a decrease of 12.5%. The combined retail sales of the Musta Pörssi and Konebox stores were €154 million and, a decrease of 15% from the previous year.
Besides the decline in consumer demand, the decreasing sales can be attributed to the decrease in the average prices of consumer electronics and transferring company-owned stores under retailer ownership. In 2009, new Musta Pörssi stores were opened in Lielahti, Tampere and in the Levi Centre, Kittilä. In addition, a new Konebox store was opened in Porttipuisto, Vantaa.
Kenkäkesko’s retail store chains are K-kenkä and Andiamo.
K-kenkä is a shoe store for the whole family, offering its customers a wide selection of branded footwear and expert service.
Andiamo’s main target group is trendy and fashion-conscious shoppers, for whom the store offers a fashionable selection of shoes that is constantly being updated.
The K-Group’s speciality shoe outlets also include the Kenkäexpertti stores which operate in smaller towns.
There are 55 chain stores in all: 35 K-kenkä, 16 Andiamo and four combined Andiamo/K-kenkä stores. There are also 34 Kenkäexpertti stores, which operate outside the chains.
The net sales of Kenkäkesko were €24 million in 2009, a decrease of 7.9%. The sales of the Andiamo and K-kenkä stores declined by 3.0%, and the combined sales of all of the K-Group’s speciality shoe stores amounted to €58.3 million.
In 2009, two new K-kenkä stores were opened, one in the Elo shopping centre, Ylöjärvi and one in the Skanssi shopping centre, Turku.
Kenkäkesko and Andiamo received international recognition and attention for The K.E.N.K.Ä 09 shoe design contest targeted for the young. They ranked fourth in the Retail/Direct Sales/Consumer category of the ECHO Awards, the direct marketing competition organised by DMA, and received the ECHO LEADER AWARD 2009
Hypermarket and department store trade
K-citymarket, Anttila, Kodin Ykkönen and NetAnttila
Market share cannot be reliably calculated
Competitors: department stores, hypermarkets, speciality store chains and online stores
Sports trade
Intersport, Budget Sport and Kesport
Market share 34% (own estimate)
Competitors: Sportia, Top Sport, Stadium, department stores and hypermarkets, and other speciality sports stores
Furniture trade
Asko and Sotka
Market share in Finland about 17% (own estimate)
Competitors: furniture and interior decoration stores
Home technology trade
Musta Pörssi and Konebox
Market share 9% (own estimate)
Competitors: stores specialised in home technology, hypermarkets and online stores
Shoe trade
K-kenkä, Andiamo, Kenkäexpertti
Market share 10.5% (Association of Textile and Footwear Importers and Wholesalers and own estimate)
Competitors: other speciality stores, department stores, hypermarkets, sports stores and online stores
K-Group’s home and speciality goods trade, retail and B2B sales |
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| Number | Sales (incl. VAT), € million |
|||
| 2009 | 2008 | 2009 | 2008 | |
| Anttila department stores | 31 | 30 | 370 | 393 |
| Kodin Ykkönen department stores for interior decoration and home goods* |
10 | 9 | 161 | 181 |
| Distance sales (mail order and NetAnttila) |
1 | 1 | 86 | 93 |
| K-citymarket, home and speciality goods | 69 | 64 | 699 | 666 |
| Asko | 33 | 32 | 91 | 94 |
| Sotka | 50 | 52 | 99 | 109 |
| Intersport | 57 | 57 | 243 | 233 |
| Budget Sport* | 6 | 5 | 32 | 26 |
| Kesport | 37 | 38 | 31 | 31 |
| Musta Pörssi | 53 | 54 | 145 | 180 |
| Konebox* | 3 | 2 | 10 | 3 |
| Shoe stores | 89 | 94 | 58 | 62 |
| Home and speciality goods stores, Finland |
439 | 438 | 2,026 | 2,070 |
| Anttila, Baltic countries | 2 | 2 | 11 | 17 |
| Indoor, Baltic countries | 9 | 13 | 13 | 26 |
| Home and speciality goods stores, Baltic countries |
11 | 15 | 24 | 43 |
| Home and speciality goods trade, total |
450 | 453 | 2,050 | 2,113 |
| * incl. online sales | ||||
|
2009 | 2008 | ||
| Net sales | € million | 1,558 | 1,606 | |
| Operating profit | € million | 66.5 | 63.6 | |
| Operating profit excl. non-recurring items | € million | 29.5 | 31.2 | |
| Operating profit as % of net sales excl. non-recurring items |
% | 1.9 | 1.9 | |
| Investments | € million | 29.6 | 60.5 | |
| Return on capital employed* excl. non-recurring items |
% | 5.8 | 6.2 | |
| Personnel average | 5,666 | 5,801 | ||
| * cumulative average | ||||
|
€ million |
change, % |
||
| K-citymarket, home and speciality goods | 595 | 5.1 | ||
| Anttila | 513 | -8.0 | ||
| Intersport | 165 | 4.3 | ||
| Indoor | 155 | -12.4 | ||
| Musta Pörssi | 107 | -12.5 | ||
| Kenkäkesko | 24 | -7.9 | ||
| Total | 1,558 | -3.0 | ||
Home and speciality goods segment’s |
2009 | 2008 | ||
| Non-current assets | 304 | 345 | ||
| Inventories | 223 | 257 | ||
| Short-term receivables | 174 | 156 | ||
| ./. Non-interest-bearing debt | -260 | -246 | ||
| ./. Provisions | -8 | -7 | ||
| Capital employed** | 434 | 504 | ||
| ** capital employed at the end of month | ||||
