Dutch textile discount chain Zeeman will invest a lot into its stores this year, while it also seeks further European expansion on top of eCommerce trials. The goal is to turn around the very first turnover drop in a few years.
644.7 million euro turnover
Despite (or thanks to) the crisis, Zeeman’s turnover grew every year, to 650.8 million euro in 2013. However, its 2014 turnover dropped to 644.7 million euro and its profit dropped as well, from 22.1 million euro to 16.2 million euro (with net profit at 8.9 million euro). CEO Bart Karis took it as a sign to invest a lot, as business paper De Tijd notes.
Currently, the chain has 1,236 stores, including 550 in the Netherlands and 279 in Belgium. Karis does attribute the turnover drop on Belgium, partially. “The crisis has belatedly hit Belgium, whereas the Netherlands felt the brunt of it over the past few years and is now recovering.” However, Zeeman is not panicking. “It is extremely helpful that we sell basic clothing as people do not cut back on those items. We predict Belgian sales to pick up again fast, because its customer base has always been loyal which means it is a very stable country.”
To turn the tide, Zeeman will vigorously remodel its stores. “That is the biggest reason for our lower profit”, the CEO says, because a remodeling operation means the stores have to close for a while. “We have remodeled 280 stores in the past two years and we will remodel another 100 in Belgium this year. We will keep up that exact same pace in the Netherlands, which means we will have remodeled every store in three years’ time.”
Expansion outside of Belgium and the Netherlands
The second pillar for Zeeman is expansion. It is already active in Belgium, the Netherlands, Germany and France and “recently, we headed to Spain, where we have 4 stores, and Austria, where we have 2. We will open 100 new stores this years, mostly in new countries, because we have pretty much reached the limit in Belgium and the Netherlands”, Karis said, despite not revealing where the new stores would be located.
These plans puts Zeeman in direct competition with Irish price fighter Primark, but that is not a worry for the Zeeman CEO. “Primark does indeed offer more fashionable clothing at cheap prices, but our clothing is more timeless. Admittedly, we do feel it if a Primark arrives in the neighbourhood: either we take advantage of its popularity or we see a slightly lower turnover as our customers become curious and visit the Primark, but they come back quickly. We have noticed that Primark mostly attracts younger people, while we service a broader range of customers.”
Faith in eCommerce
Unlike Primark, Zeeman does have faith in eCommerce. It already has a Dutch web shop, which has drawn a lot of attention with a 29.99 euro wedding dress. The very first “batch” of 1,500 dresses was sold out instantly this morning. Nevertheless, its web shop is only in its infancy and there are no plans for a Belgian version just yet. “We are still experimenting and are not in a rush”, Karis told De Tijd. “Do we have to catch up to other store chains? Possibly, but their web shops are losing money and if we roll out our own web shop, it has to be profitable.”
He feels other discounters, like Action and Primark, will change their mind and follow suit with a web shop, despite earlier claims that their cheap product range makes profitable web shops impossible. The Zeeman CEO did admit that his type of store chain does not need a web shop as much as a traditional store chain. “That is because we are very much focused on pricing and we also have a lot of stores in Belgium and the Netherlands, which lowers our need for a web shop.”
Zeeman, founded in 1967 by Jan Zeeman in Alphen aan den Rijn, currently employs 5,043 people.
