We - KappAhl

CHRISTIAN W. JANSSON, PRESIDENT AND CHIEF EXECUTIVE
OFFICER ANSWERS QUESTIONS ON THE PAST YEAR:
“ WE HAVE EXPANDED FASTER THAN
EVER – WITH GOOD PROFITABILITY
IN A TOUGH MARKET”
WHAT WERE THE MOST IMPORTANT
EVENTS OF THE YEAR AT KAPPAHL?
Managing to expand with new stores
faster than ever before, and deciding
to take the step into a new market, the
Czech Republic. Expansion is taking place with good profitability,
despite the severe economic downturn.
During the year the net number of stores opened was 28,
which is clearly better than target. There is no reason for us not to
make our offer available to more consumers, so we must be more
accessible, with a presence in the places where our customers are.
BUT ISN’T IT RISKY TO EXPAND SO EXTENSIVELY IN A
DOWNTURN? On the contrary. We are operating at a profit and
store expansion does not require any further working capital.
Remember too that our operations offer considerable economies
of scale. Opening one more store in a good location not
only means that we have a new and substantial source of revenue
– it also makes a contribution on the margin, reducing the unit
cost of goods sold.
WERE THERE ANY OTHER IMPORTANT EVENTS IN THE
COMPANY? We had a very successful denim campaign, with
everything from traditional blue jeans to trendy fashion jeans.
This is an example of how we can gain a comprehensive hold on
an important fashion category. We also introduced the Vintage
Stories collection, which is a good illustration of how we can
bring impulses to the fashion market. We are not big enough to
create a fashion, but we can influence it.
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What we perhaps do best of all is create volume products in the
current fashion. Our aptitude here was apparent in this year’s
knitwear fashion. I also specially want to mention KappAhl
Man, that has undergone a fantastic change during the year, with
a fashion feeling that appeals to customers.
WHAT WAS THE MOST IMPORTANT EVENT IN THE REST
OF THE WORLD? Without doubt economic developments. We
were a bit taken by the force of the downturn. Companies in our
industry often become a bit cautious when conditions change in
that way – going back to safe bets as the fear of doing the wrong
thing increases. The problem is that the stores then become a bit
boring. Value-for-money fashion is often about daring to do
what a lot of people like, not what a lot of people used to like.
This shift is often unconscious. When I look back I think that
we experienced something of that at the beginning of the financial
year. But we soon found our way back, and in the second half of the
year we were right on track again – which our profitability shows.
The fact that in a period
that has been among
the toughest for many
years we succeeded in achieving an
operating margin of almost 11 per
cent I see as a sign of strength.
Kappahl 2008/2009