The Hemtex business model is based on efficiency and control of the entire value chain, from design and purchasing via distribution to store sales, which creates favorable conditions for making competitive offerings to customers.
Hemtex has considerable knowledge of customers’ preferences through retailing and its own market surveys, and Hemtex continuously monitors the trends in home textiles and related industries. When fashion trends are about to reach commercial volumes, Hemtex reacts rapidly. To hit the target in terms of the product range, time is an important factor – which is why it is important that design and purchasing occur as close as possible to the sales season. Consideration should also be given to the fact that manufacturing and delivery require a certain lead time in order to keep costs at a reasonable level. Central functions at the head office in Borås ensure that the entire value chain, from concept to retailing, is man-aged as efficiently as possible.
Focus on own design
Hemtex’s product range primarily consists of products of its own design. Textile patterns are produced by the design department at the Borås office, for example, or purchased from independent designers.
Hemtex’s designers work closely with purchasers and gather ideas from the world around them and from stores to ensure that the stores continuously have access to the right, up-to-date range.
The product line, store concepts and activity plans are developed by the Product Line and Market Council, with participants from store operations and corporate functions at the Borås office. Hemtex also works actively with trial sales to identify products with substantial sales potential.
Proprietary and franchise stores
Hemtex stores have two forms of operation: proprietary stores and franchise stores. Regardless of their form of operation, the stores are managed in accordance with the Hemtex concept and guidelines, but with scope for local business influences. However, the target scenario, strategy and culture are the same for everyone working at Hemtex, regardless of the store’s ownership form or the country in which it is located.
The Group operates proprietary or franchise stores in selected retail centers, primarily in large city areas and in strategic locations. In each geographic area, the number of stores should be sufficient to enable an operating organization to be formed to ensure sales, earnings and skills development.
By operating its stores on a proprietary basis, Hemtex establishes direct contact with the market, which is also advantageous for the wholesale operations. This enables Hemtex to become an even more efficient supplier, which also benefits franchise holders.
Supplementing operations through the franchising concept enables additional economies of scale, since expansion is accomplished with lower establishment costs and less tied-up capital than would otherwise be possible for the Group.
