We - KappAhl

MARKET
STABLE,
GROWING
AND LOYAL
– OUR TARGET
GROUP IN A
NUTSHELL
KappAhl sells clothes in the fashion markets
of Sweden, Norway, Finland and Poland. After
the close of the financial year, in October 2009,
KappAhl took the step into the company’s
fifth market, the Czech Republic.
Sweden is KappAhl’s single largest market. The total value of
the company’s markets, excluding the Czech Republic, at the
beginning of 2009 was SEK 194 billion.
The financial crisis and subsequent downturn in the national
economy (GDP) have affected demand for fashion negatively.
At the same time we can note that the forecast for private consumption
looks better in the countries where KappAhl operates
than for Europe on average.
For Poland and Norway the full year forecast for 2009 indicates
continued growth in private consumption, though with a
lower rate of increase than the previous year.
STABLE AND LOYAL CUSTOMER BASE THAT CONTINUES
TO GROW The GDP trend affects growth in the fashion trade
generally. In the same way, private consumption, which has been
increasingly focused on clothes, has contributed to growth in
KappAhl’s markets.
KAPPAHL’S
NET SALES
by market
Norway
28% (28%)
8
Poland
5% (5%)
Finland
14% (12%)
Sweden
53% (55%)
SWEDEN
Population: 9.1 million
Consumer spending on clothing per capita
including VAT: SEK 5,521 per year.
SEK bn %
4,000
6
3,000
2,000
1,000
0
–6
2005 2006 2007 2008 2009*
Changes in population trends are also slowly but surely affecting
patterns of consumption and behaviour. In most Western
European countries the percentage of the population over the
age of 30 is increasing. This benefits KappAhl, where the main
target group is women aged between 30 and 50.
Another advantage is that this target group is more predictable,
that is more secure in its fashion style, than for example
younger consumers. This gives KappAhl a comparatively stable
and loyal customer base, which makes relatively frequent repeat
purchases.
VALUE-FOR-MONEY FASHION IS POPULAR IN “ALL
WEATHERS” Normally financial market developments have
a relatively low impact on most of KappAhl’s customers, since
they have a fairly low percentage of loans and limited investments
in shares. Sharply increasing energy and food prices may,
however, have an effect.
In general it is mainly more expensive durables and designer
label clothing that people cut back on when GDP growth flags
and the scope for consumption decreases.
They continue to allow themselves value-for-money fashion
and consequently sales here are not affected as much.
3
0
–3
■ GDP
GDP growth
Consumer
spending
NORWAY
Population: 4.8 million
Consumer spending on clothing per capita
including VAT: SEK 8,492 per year.
SEK bn %
4,000
8
3,000
2,000
1,000
0
–1
–4
2005 2006 2007 2008 2009*
* Estimated for the full year 2009. * Estimated for the full year 2009.
5
2
■ GDP
GDP growth
Consumer
spending
Kappahl 2008/2009