A case for physical retail
My late grandfather Birger Olsson, founder of the family company Ohlssons Tyger, was a salesman to the core.
He grew up with nine siblings in a cottage behind the railway in Skorped in the North of Sweden, about halfway up through the country. At the age of ten, he found a piece of copper sheet that he sold to a scrap dealer in Sollefteå for 190 Swedish kronor. His father, who worked at the railroad, earned 200 kronor per month. Throughout his upbringing, Birger bought and sold various items: clothes, watches, seeds, and steel. He used the money to buy clothes, an interest that stayed with him throughout his life.
Prior to establishing Ohlssons Tyger in 1971, he worked as a store clerk, a traveling salesman peddling encyclopedias, and ran a clothing store with my grandmother. Me and my three brothers grew up listening to his stories of entrepreneurship. Somehow, it must have influenced our world view, since all of us turned out to be entrepreneurs ourselves. Two of my brothers run an entertainment agency in Los Angeles, the third took over Ohlsson’s Tyger.
I think about this when I find myself in the audience listening to Ayad Al-Saffar, the Swedish entrepreneur who recently acquired Sweden’s largest department store Åhléns.
Ayad is also a salesman to the core.
The Lebanese-born retailer is famous for his extravagant and “un-Swedish” lifestyle, sporting colourful tailoring and riding around in a custom made Rolls Royce, but also for turning troubled retail chains into profitable juggernauts, from Swedish Ur & Penn to Dutch Lucardi.
Listening to him talking at an event hosted by the Association of Swedish Beauty Brands and their founder Göran Agardh, I realise Ayad Al-Saffar is of a different breed of retailer. He is old-school. He is a true entrepreneur, who sees opportunities at every corner. He started his journey bringing a truckload of watches, clothes, and other items to Sweden from Lebanon in the early 1980s, when the Lebanese currency was devalued. He sold them at markets and directly to stores.
He speaks fondly about negotiation prices with his suppliers in Asia and maximising margin on products (“my aim is to get to 90%”). He is somewhat evasive when I ask about his sustainability efforts, but he does reveal that they are planning take-back programmes for items like children’s wear.
What strikes me the most is that he champions the art of selling in the physical retail, a lost art that has been continuously ignored in the past few decades in Sweden. Brands and retailers don’t prioritise inspiring or incentivising staff, with diminishing service levels as a result.
Ayad Al-Saffar’s roots are in physical retail and his belief in the same is what made him bet a significant portion of his wealth (including selling Lucardi) on buying Åhléns from Antonia Ax:son Johnson. He wants to open 100 new Åhléns departments stores in Sweden, reopening the ones that have been shut down in the last few years and establishing many more. Talks of making retail “relevant” again and repositioning Åhléns as “the village church” in every Swedish town.
So far, the ambition seems to have paid off. Sales are up 40%, according to his speech. With a decimated overhead (some 200 of the head office’s 300 employees have been sacked) Åhléns is now profitable.
When asked how he knows that he is relevant to his customers he simply replies:
“I hear it from the sounds of the cash registers”.
That sounds exactly like something my grandfather could have said.
