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Introduction

The IADS had the occasion to travel to Finland, Sweden and Norway to visit Stockmann, NK and Steen & Strom respectively. All those three venerable companies, true institutions in their countries, have started a transformational post-pandemic journey in order to become destinations again in their respective cities.

At a moment when tourism is starting again and the three countries seem relatively immune to the difficulties created by the war in Ukraine, we review where they stand, their innovations worth noting and why their transformation is far more than just a revamp or a digital reset: for at least two of the three companies, they are challenging their own business model to the point of admittedly literally learning a new job.

Let’s embark north of the 60th parallel to see what is going on!

This third part is dedicated to Steen & Strom in Norway.

Company history: the oldest department store company still in operations in the world

A former member of the IADS (1940 – 1992), Steen & Strom is one of the oldest, if not the oldest, department store company still in operation today as it was founded in 1797. The first department store, built in 1874 over four floors, was destroyed in a fire in 1929 and the current 6-storey store, of Parisian inspiration, was built and opened in 1930. Steen & Strom has been instrumental in introducing novelties to Norway, from fashion to technology, as well as innovations such as the first escalators.

The company went bankrupt in 1992 and from then, went from hands to hands of various owners, until being purchased by Soylen Eiendom in 2011 for €95m, who then sold the department store as well as the surrounding 11 real estate locations in 2015 to the Meyer Bergman investment company for €500m. Meyer Bergman, renamed MARK in 2020, still owns Steen & Strom to this date, through the Norwegian structure Promenaden Management which operates both the department store, the nearby Eggert shopping centre, and the luxury boutiques locations in the streets adjacent to the department store (MARK, based in London, is involved in maximizing the value of prime real estate assets such as The Whiteley in London, Richardstrasse 20 in Berlin or the Pershing Hall Hotel in Paris).

The Steen & Strom store owned and operated by Promenaden Management, is not to be mistaken with another Scandinavian company with the same name, owned by Klepierre and involved in managing 52 shopping malls across the region. To this end, the department store has rebranded into Steen & Strom 1797, also emphasizing its history and heritage.

Given the fact that the company is privately held and Promenaden Management a holding company, it is difficult to get actual numbers about the turnover of the store. Steen & Strom 1797 mentioned that they experienced record sales in Q1 2022 and claim a total footfall of 2.2m visitors, with the goal to increase that number to 5m in the coming years (the Karl Johans gate, where the store is located, is Norway’s most visited shopping street with 15.5 shoppers p.a. in normal times).

Visiting the store: a luxurious work in progress

The store, renovated in 2020 for a total investment of €29.5m, is structured on 6 floors and 12.500 sqm including the basement and a fully renovated entrance on Karl Johans gate, which allows to open the building on the outside, bringing in a lot of light and provide a spectacular space for events and marketing activations. It has already proved to be a success as the footfall and traffic have constantly increased since the opening of this section.

The department store’s revamp is timely: Oslo is ramping up its touristic attractivity, with the constant opening of luxury hotels, and fine dining restaurants, but also with the inauguration of impressive landmarks: after having opened the Opera House in 2008 and the Astrup-Fearnley contemporary art museum (in a building designed by Renzo Piano) in 2012, the city inaugurated the new Munch Museum at the end of 2021, and has just opened the new National Museum in May 2022, all located in different zones of the city, allowing to spread the development and investments. In order to be part of the game, Steen & Strom 1797 has worked on its visibility and recognition: the store is perfumed with its own recognized scent and equipped with a studio quality sound system, windows have been renovated and are at the same time promotional and educative, the visual identity has been modernized with the use of vivid colours, and the website will include e-commerce activity in July 2022.

The revamp of the store is still in progress, meaning that fully finished zones coexist with sections still under construction (at the time of visit). For instance, while the entrance on Karl Johans Gate is fully finished, spectacular and extremely inviting, opening up to the event space and giving a good view of the cosmetics section, the opposite entrance is still under process and opens directly to hoarded sections. The surroundings of the store are perfect, since Steen & Strom is adjacent to Louis Vuitton, Chanel, Saint Laurent, and houses the Gucci, Balenciaga or Burberry stores.

The basement is extremely immersive, with a series of entertaining food concepts, extremely well executed, which allowed generating a significant footfall at lunchtime with employees from nearby coming to experience the gourmet offer there (ranging from bars, restaurants, to delicacies and a deli). This floor represents 24% of the total business in the store, and upscale private labels are planned to be launched in 2023.

The ground floor is very different from what has been seen in the other Nordic department stores: while it houses cosmetics and the usual international brands, the choice has been to avoid having the classical white logo on black boxes approach, and replace it with the store’s own concept, all in low-rise white marble displays, lit with huge rounded lamps, and a space dotted with couches and activation zones including a lot of testers. As a consequence, the immersion in the store’s atmosphere works also extremely well here, and provides an enjoyable experience, completed by the atrium, which is a new space consecutive to the renovation of the entrance on Karl Johans gate, where small accessories such as Dior sunglasses and caps are sold (a small shop-in-shop in the entrance dedicated to high-end caps designed and produced by a local brand, Varsity, generates a €10,000 weekly turnover). Interestingly, the store, still in revamp and repositioning, does not sell footwear, lingerie or hard luxury accessories yet, but already outperforms its targets, convincing the leading team that the steps taken are the right ones.

The first floor is dedicated to “men’s new luxury” but, in reality, is still in progress when it comes to the offer. While all peripheral zones are at brands’ concepts, the central area is in a generic concept (but brands are not operated in wholesale as Steen & Strom 1797 is still a 100% leasing concept), including a more formal offer than what has been seen in Helsinki and Stockholm, and an underwear section located in the middle of the floor. There is also a multi-brand concept, “Collage”, which displays brands such as Givenchy, Celine, and Off White (some of them are also available in the city in their boutiques, or in other points of sales). Since the offer is a work in progress, the goal is to increase the size of the Collage space, and also go more upmarket and luxurious when it comes to the brand selection available in the generic area. Also, one must remember that the current structure of the store will be revised in the future, as the first floor is, according to the plan, to be dedicated to accessories and shoes (a category which is not yet sold at all in the store). This floor will also provide the click & collect service once activated.

The second floor is dedicated to “women’s new luxury”, and, here again, still in process, with a very large section dedicated to dummies, probably for lack of better. The whole building is structured according to 2 escalators at the opposites of the floors, allowing smooth and easy navigation on each of them. Here again, the brand selection is also a work in progress, with good visibility given to Scandinavian and Norwegian brands. There is also access, separated by a small bridge, to a very high-end hairdresser where customers can also buy beauty products, in double exposure to the ground floor. This floor also accommodates the personal shopper lounge.

The third floor gathers the “contemporary fashion” and the brand selection is quite adequate, echoing the trendy and young feeling of the floor. It is to be noted that, so far, there is no F&B space on any of the floors with the exception of the basement, and this is a topic that the leading team is currently exploring. It is possible, from this floor, to access a separate space via a small bridge where the outlet section can be found. Execution is very elegant.

The fourth floor is advertised as childrenswear and home lifestyle in the store maps, but, so far, is used as an exhibition space, just like the fifth floor, advertised as “events and services” but so far only housing the Promenaden Management offices.

All in all, the overall impression is a very good execution and attention to detail for the finished sections of the store, which conveys a convincing feeling of luxury and shopping appeal. The basement and ground floors are the zones which are closest to completion and give a very positive understanding of what the store is striving to achieve.

Interestingly, there are many internal debates in the company to take a similar road than the one taken by NK in Stockholm, namely operating directly with some multi-brand zones, by selecting, buying and selling specific brands. The rationale for this approach is to consolidate the fashionable positioning of Steen & Strom 1797 in a city where competition exists but has not coped yet with international standards.

The closest competitor in town is the Paleet shopping centre. Just like Steen & Strom 1797 (and NK in the region), it operates a business model based on leasing, including a historical fashion multi-brand, Hoyer (with brands such as Zadig&Voltaire or Anine Bing for women’s, and Burberry, Comme des Garçons, Heron Preston, Lanvin, Moncler, Nike or Off-White for mens). This is not the historical location of Hoyer, as they recently relocated to this centre, and they are said to have lost customers in route. Apart from the brand offer (which is not competitive when it comes to womenswear), the size, width and breadth of assortment presented there tends to validate Steen & Strom 1797’s thinking that they have an opportunity to become a fashion centre, in addition to already being an undisputed luxury hub.

Check out the collection of pictures here!

Conclusion

What to remember from Steen & Strom 1797? Since the store is still in work-in-progress mode, it is difficult to draw conclusions already. However, what has been striking during the visit was the fact that Oslo has considerably evolved when it comes to fashion, with a young and affluent clientele, seemingly immune to the European political events and worldwide economic woes, and eager to spend. Steen & Strom 1797 has understood that and the moves made to make the most of this opportunity have already been successful. The atmosphere, execution and quality of details in the store are all impressive and make it the most adequate place to shop in the city so far.

Of course, there are some challenges, such as making sure that the right brands are present (which implies that they realize the potential of the market, and this is not obvious as Scandinavia is often overlooked in terms of retail potential) and making a decision on the business model (leasing vs. buying) which will increase flexibility but will also imply new competencies and team structure in the company.

But whatever the decision made, it is already obvious that Steen & Strom 1797 is making all the needed steps to becoming a destination for all tourists visiting Oslo (a growing breed), in addition to entertaining the local, young and experience-hungry clientele. In addition to that, we also believe that the level of immersion and execution so far should also put back Steen & Strom 1797 on the international scene in the mid-range as it has all that it takes to become a reference for other markets too.

Credits: IADS (Selvane Mohandas du Ménil)