EFFICIENT STRUCTURE WITH THE POTENTIAL TO MANAGE MULTIPLE CLOTHING CONCEPTS
In 2003, Mellby Gård acquired family-owned company Flash. In recent years, an opportunity to add concepts was noted and, in 2017, Lund Fashion was launched and now operates two clothing concepts – Dea Axelssons in addition to Flash.
“With Lund Fashion, Mellby Gård has built an infrastructure with the potential to manage several clothing concepts,” says Thomas Gustafsson, Chairman of Lund Fashion. “The company’s focus is to continue developing Flash and Dea Axelssons. If it can then manage additional concepts is a matter we will approach with great caution – and curiosity. We should be prepared if the opportunity arises.”
“When Mellby Gård acquired Flash, it was a very well-managed company with 30 shops,” says Thomas Gustafsson. “Mellby Gård’s basic philosophy is to continuously develop and grow companies. The common thread is the long-term approach and being an active owner in both prosperity and adversity.”
“Today, Flash has stable operations with 75 shops across Sweden and three in Denmark. Although Flash is continuously capturing market share, rapid expansion by adding shops is difficult as we more or less cover the entire country already,” says Fredrik Johansson, MD of Lund Fashion. “The opportunity to add Dea Axelssons’ 25 shops therefore came at a good time.”
Both Flash and Dea Axelssons target “women in the prime of life”, with clothes for everyday life, in private and in the workplace. Customers are loyal and return continuously.
“With our broad target group, we differ from many of our competitors who target young women. Our target group is exciting and has money to spend.”
The clothing industry in Sweden has had a tough year. Most Flash shops have nonetheless developed better than the industry. The profit trend also remained favourable. For Dea Axelssons, much time has been spent integrating and securing the operations within the new structure.
“We are now fully up to speed and see a very exciting time ahead of us,” says Fredrik Johansson, MD of Lund Fashion. “It has been a big change to progress from one to two concepts and to get everyone thinking in terms of two different concepts internally. Our organization has managed this much better than expected. Many have seen it as a challenge and an opportunity to develop.”
All Lund Fashion products are of proprietary design and sold only through the two concepts. Accordingly, the purchasing and design departments are key and those working there have become familiar with the customers and their needs. The process continues to create selections that appeal to existing and new customers alike.
“We know the Swedish market and that was a major reason for investing in Dea Axelssons. By focusing on the best retail locations, we ensure that customers find our shops. Today, omni-channel retail, accessing customers through several channels, is essential. Customers start by browsing on their phones and then visiting shops to try clothes on. Some buy products online, others in shops. It’s not ‘either or’, it’s ‘both and’ – the channels complement each other.”
“Today, retail focuses on creating flexible approaches to be able to respond rapidly to customers’ purchasing behaviours,” says Thomas Gustafsson. “We are constantly reviewing our shop portfolio. As a result, we may choose to have more or fewer shops, what is important is that we can act quickly.”
Both Flash and Dea Axelssons have e-commerce operations that are continuously growing, but still account for relatively modest volumes. Many customers have switched to shopping online or complement their shopping there. Most online sales actually occur in locations where Lund Fashion already has shops.
“Lund Fashion has a flat organization,” says Thomas Gustafsson. “Its history as a family businesses plays a role – management has always worked closely with employees, plus there is a huge focus on the shops and customers. Lund Fashion is an entrepreneurial company at heart and acts in a straightforward and intelligent way. Our shop employees know they are there to take care of customers, not to fill in unnecessary reports.”
“That way, we get employees who like selling and working in shops,” says Fredrik Johansson. “Many of our employees, both centrally and in the shops, have worked with us for several years. We have grown quickly, but maintained the atmosphere of a small company where everyone knows each other. Our organization is like an upside-down triangle with the shops at the top and the rest of the organization supporting them.”
“It is a privilege to have an owner that acts as long term as Mellby Gård, providing support in many areas, particularly in contract negotiations,” says Fredrik Johansson. “Being a part of Mellby Gård creates a sense of security for employees, while our owners do naturally expect us to deliver results. We want to develop continuously, taking the business one step further, and adding Dea Axelssons is clear evidence of that.”
“It has been a big change to progress from one to two concepts and to get everyone thinking in terms of two different concepts internally. Our organization has managed this much better than expected. Many have seen it as a challenge and an opportunity to develop. We are now fully up to speed and see a very exciting time ahead of us,” says Fredrik Johansson.