An Ikea-style line-up of oddball products including mustachioed wine-openers and fruit-shaped flip-flops has fueled the global expansion of Danish retailer Tiger, with three new stores a week supporting its owners' ambitions for a stock market listing.
A new outlet in London’s leafy Notting Hill neighborhood this month brought the store count to 500, selling novelties such as plastic chandelier birthday cake decorations.
Tiger entered New York in May, and the discount homeware chain is focusing expansion on North America and Asia- Pacific after adding 124 stores in 2014. "I don't see why we shouldn't keep up expanding at this pace for the foreseeable future," said chief executive Xavier Vidal, a Frenchman who joined in January. "We are not restrained by capital to keep expanding this fast."
Penneys and Ikea model
Tiger stores are typically packed with basket-toting customers snatching up gadgets they might have never imagined, such as designer colored bike locks and lime-green felt elephants. About 95 per cent of Tiger’s wares cost less than €15, putting them in the same league as companies like Ikea and Irish retailer Penneys/Primark.
"It's about lifestyle shopping that exceeds just the basic needs," said Mette Skovgaard Frich, an editor at Aarhus, Denmark-based Retail Institute Scandinavia. "They feed off a persisting trend of Nordic design and pricing that makes it easy to shop."
The growth of Tiger – whoseparent company Zebra A/S is majority owned by private-equity firm EQT Partners AB – also points to improving consumer demand across Europe.
Moody's Investors Service forecasts modest sales growth in the region over the next 18 months, as economies in Spain, Portugal and Italy rebound.
2,500 Products
Having started with one shop in Copenhagen 20 years ago, Tiger is now present in 26 countries and sells as many as 2,500 products. The stores were first called Zebra and later changed their name to Tiger, which pronounced in Danish, sounds similar to a word for 10 kroner. The common denominator of its products is colourful and inexpensive, according to Vidal.
Profit rose 68 per cent to 196 million kroner (€26.3 million) in 2014, excluding some items, as sales rose 44 per cent to 2.46 billion kroner (€330 million). Founder Lennart Lajboschitz in 2012 divested 70 per cent of Zebra to EQT, which is linked to Sweden's billionaire Wallenberg family.
The buyout firm generally aims to divest investments in four to five years. Yet EQT has no time frame for exiting Zebra as there’s still room to grow, Morten Hummelmose, head of EQT’s Danish equity team, said. “I would consider an IPO a realistic option,” Hummelmose said.
- (Bloomberg)
