Sunday , June 13 2021

Northern Lights – Here goes wrong for the sports fighter:



Nettavisen: – This is not XXL. We are not only low-priced, says XXL's temporary boss, Tole Grueter, of Nettavisen.

In 48 of 52 weeks last year there was one word that dominated the XXL customer magazine: buying a party. The company advertises almost exclusively for its low prices through "giant European party purchases" in 2018. At the same time, the profitability of the company has been raging.

exit

Thanks to the cheap XXL car, it's hard to differentiate between clean, low-cost chains such as the sports shop. Now XXL is trying to rise again after the weak last year. One of the things they change is customer reports. They are sent weekly to about 1.4 million Norwegian households.

In the latest customer review, the company has removed the word "buy a party". Instead, XXL points out that XXL has recently come out best in the Consumer Council test.

– We as a chain offer much more than low prices and we need to show it. Our customers not only want a low price. We have customer benefits, a great choice in most sports, and we offer goods in many price ranges, "says Grüther.

Price pressure

Cruel price pressures have contributed to the fact that the company has started a financial hit last year. Especially bad happened during the period around Black Friday, when the chain lost 40 million NOK for selling goods at a very low cost or loss.

The year-over-year data presented on Tuesday showed that the company's result halved in 2018 compared to 2017. This is a decrease of more than 250 million NOK.

Smaller shops

Now Grøterud and the rest of the leadership are warning of a few changes. It includes not only client reports. Walnut Grass also believes that XXL has invested too much clothes and will return to more sales of sports equipment.

"The clothes get very old. If you buy black skis, you can probably use them for many years without aging. It's a little less insecure with orange pants, he says.

The company also reduces the size of some stores. They have already begun with the store in Moss where the size of the store is reduced from 4,000 square meters to 3000 square meters. In this way, the sports giant saves both rents and operating expenses.

– We have to cut most of the costs. One of the main costs is rent. At the Moss shop, we cut the size from 4,000 square meters to 3,000 square meters. Then the cost goes down, and we find ourselves in a good neighbor who can also give us more traffic, says Gröterud.

He does not want to say which other stores are being reduced.

– We have a list of stores in Norway and Sweden that we want to test. This is happening over the next few years, "says Gröterud.

His predecessor Wolfe Bayerns opened the door to close the shops. Cucumber says this is not particularly important on the agenda.

– All of our stores are profitable and we are also looking to find new stores. We see that it produces good results, he says.

Two senior departure

Grueter has been sitting in the main presidency for two months after his predecessor Wolfe Borken resigned before Christmas last year, after only a few weeks at the top.

Board chair Øivind Tidemandsen at XXL, who now serves as the real-estate and business executive director, says they are working to find a new top manager on a permanent basis.

"But that is not urgent. We are carrying out a number of measures and then it is better to settle these measures before we start a new leader who wants his own ideas, "says Tidemandsen.

However, he says that the current head of Tole Gröterud, who has come from the role of a director of contract with investors and strategy, is unlikely to get a permanent job.

"Tol is not really up to date. You do not have enough experience in retail, which is what we have lost and what we need to get. But that does not mean he does not do a good job now. These things are a bit of a situation, he says.


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