Hemtex’s geographic markets

The Hemtex Group’s net sales declined by 13.5% to SEK 1,391 M (1,608) during the 2008/2009 fiscal year. Sales in comparable stores declined by 20% (neg. 4). Total sales to consumers, including franchise stores, amounted to SEK 1,431 M, a decline of 14.5%, compared with the preceding year. Sweden is the Group’s largest market with 75.4% (77,5) of consolidated net sales. Finland accounted for 15.1% (14,1), Denmark for 5,0% (4,7), Norway for 3.9% (3,5) and Estonia for 0.6% (0.2) of net sales.

Continued store expansion in 2008/2009

During the fiscal year, the Hemtex Group opened a total of 14 new stores, of which four in Sweden, four in Finland, one in Denmark, three in Norway and two in Estonia. In addition, one store was acquired from a franchise holder in Sweden. Seven new franchise stores were opened during the year, of which three in Sweden, two in Poland and two in Denmark. During the year, three stores were discontinued, of which one in Norway, one in Estonia and one franchise store in Poland. At the end of the year, 193 stores were operated by the Hemtex Group and 30 by franchise holders.

Hemtex estimates that the Group has a total market share within the Nordic countries (excluding Iceland) of 9%. The goal is to achieve a market share of at least 15% of the Nordic market.

Expansion through both franchising and proprietary stores

Expansion through franchise stores in new markets is an important component in Hemtex’s growth strategy. There are also major opportunities for supplementing the expansion of own stores in existing markets through franchises. The combined power of Hemtex’s strong concept and entrepreneurs with broad knowledge of the local market is an important key to successful establishment.

The franchise rights that were granted for Poland were by store and not for the entire region, since Hemtex wishes to keep the door open for being able to open its own stores in these markets.

Review of store structure 2009/2010

Considering the current priorities for profitability within the existing store network, the Board of Directors decided to reduce the rate of establishment of new stores for 2009/2010. During the fiscal year, four to six stores will be established, of which half will be owned by the Group. A review of the store structure is expected to result in an overall reduction of the number of stores.