According to the latest annual report, Granit’s turnover landed at SEK 235.5 million, representing a 5 percent increase. At the same time, operating profit showed a loss of SEK 75.2 million. This is a reduction in the loss compared to the previous year, when the result was SEK 85.5 million in the red.
With these figures in hand, the interior design chain is now seeking growth on the other side of the world.
However, the Japanese venture does not mean that Granit will open its own physical store with its own staff. The company has chosen a path that involves lower financial risk. Instead, the Swedish brand acts as a supplier to a local player.
Collaboration is based on a local partner solution where our partner purchases products from Granit and is responsible for sales in the Japanese market. This allows us to establish ourselves in Japan with the support of strong local knowledge, says Håkan Åkerström.
This setup means that the chain does not need to set up an entirely new logistics chain from Sweden to Asia. Production already takes place in other locations, which the company is now leveraging. However, the company in Sweden retains control over how the products are presented in the store in Tokyo.
In practice, Granit functions as a wholesaler, while the collaboration also includes our brand and marketing materials, which allows us to meet customers with a cohesive expression even in the Japanese market. The goods are largely delivered directly from our manufacturers, creating an efficient flow of goods.
During the initial period in Asia, management will monitor several different parameters. Sales are of course part of it, but initially it is more about collecting data on Japanese consumer behavior.
The first year will primarily be about getting to know the market and understanding how Granit’s offering is received by the Japanese customer. We will of course follow sales developments, but also which parts of the range work best, customer response and how awareness of Granit develops, says Håkan Åkerström and adds:
For us, the establishment is also an opportunity to build knowledge and create a long-term sustainable presence in a new market.
Even though the first Asian store is now opening its doors in Tokyo, the company is in no hurry to expand to more countries in the region.
We continuously evaluate opportunities in new markets, but our focus right now is on the establishment in Japan and making it as good as possible. There are no concrete plans for further establishments in Asia at this time, says Håkan Åkerström.
E-commerce will have to wait
At home in the Nordics, e-commerce is a central part of Granit’s business. But in Japan, the strategy looks completely different. There, sales will be entirely physical. The company plans to use the internet solely as a marketing channel to attract traffic to the store shelves in Tokyo.
At this stage, the focus is on the physical establishment together with our local partner. We are therefore not launching any local e-commerce in Japan in connection with the establishment. However, we of course see digital visibility and inspiration as an important part of building awareness of Granit in the Japanese market, says Håkan Åkerström.
On existing markets in Europe, however, management sees an increased need to integrate e-commerce and physical stores.
The company closed two stores in Stockholm last year to optimize its network. Håkan Åkerström explains that customers today expect a seamless purchase journey.
We do not see physical stores and e-commerce as two separate parts, but as parts of the same customer journey. Our stores are still very important for Granit, as that is where customers can experience the range, materials and brand for real, says Håkan Åkerström and continues:
At the same time, e-commerce is both an important sales channel and a source of inspiration and information that can also drive customers to the store. Our focus going forward is therefore to create an even clearer whole between the channels and make it easy for the customer to move between the digital and physical encounter with Granit.
The hunt for black figures
While the expansion is rolling out abroad, the fact remains that the business is still operating at a loss. The parent company previously this year had to inject over SEK 100 million to secure financing.
Now, a frantic effort is underway at headquarters to turn the ship around.
We are currently implementing a broader change initiative with the aim of creating a stronger and more profitable Granit business. This involves how we organize ourselves and work more efficiently, but also developing the range, strengthening our commercial focus and continuing to move and clarify Granit’s brand and position, says Håkan Åkerström.
The focus going forward is not only on cutting costs, but also on working smarter internally between different departments to increase conversion in all channels.
We are also working more integrated between marketing, e-commerce and physical retail to both drive traffic and increase conversion, says Håkan Åkerström and concludes:
Overall, it’s about creating a clearer, more relevant and more efficient business, with profitable growth as the goal.