Despite the low average growth in the apparel industry in recent years, Zara and Brands21 are among the growth winners in 2020.
Norwegians traded for more than NOK 606 billion in 2020. This is a 6 percent increase over 2019, according to this year’s Virke trade report.
The report covers all the chains that sell products to Norwegians.
The biggest growth winner is the Normal low price chain, which has the highest average annual growth in turnover in the last five years, with growth of 359.3 percent.
Among the other growth winners in the report are the two clothing chains Zara and Brands21, which oppose developments in their own industry.
Brands21 previously sold mainly leather and fur, but in recent years it has expanded its range.
The garment industry has declined in the last five years with a turnover of 4.9 percent, but the two chains are still among the winners.
Brands21 has the best profitability of all the chains, and had an operating margin of more than 22 percent in 2020. In addition, they had an average annual growth between 2016 and 2020 of around 67 percent, while Zara has grown on average more 15 percent in the same period. It ranks both companies in the top twenty growth winners.
– The trend of clothing has been declining. There, Zara and Brands21 met the customer and went the other way. They are clear about what they are going to accomplish and are growth winners who go the opposite way. What they have done is extraordinary, says Virke CEO Ivar Horneland Kristensen.
Better equipped than several other countries
Horneland Kristensen does not hide the fact that 2020 has been a special year.
– It has been a year of restructuring on a historical level. Never before have the economy and trade been exposed to various shocks, both to the downside and to the upside. The trade is constantly changing and the chains have handled it masterfully.
He believes that Norwegian trade has tackled the challenges so well that they are now better equipped than many of their foreign competitors.
– Trade is now better equipped to be the major employer in all of Norway. The industry has strengthened and in Norway we are better equipped to continue the restructuring than in many other countries, both in terms of online shopping and in terms of sustainability, explains Horneland Kristensen.
Characterized by Norwegian coronavans
Many of the growth winners in this year’s report have emerged stronger from a pandemic year and benefited from the fact that Norwegians’ habits have changed.
Closed restaurants and low cross-border trade have resulted in a strengthened grocery trade, where online grocery trade in particular is flourishing. It increased by as much as 61.1 percent from 2019 to 2020.
Pet stores are also among the big winners of growth. Musti and Pet XL are among the fastest growing chains in the country.
Horneland-Kristensen is not surprised and relates the growth to the habits of Norwegians during the pandemic.
– It says a lot about what we have done when we were in the home office, that the pet stores are going up, it is a consequence of the fact that we have acquired animals during the pandemic. The fact that supermarket chains are on the rise is a direct consequence that we have eaten more at home. In addition, we see further growth in other industries such as sports and leisure, where Bergans, among others, are doing well, because we have been tourists in our own country.
Virke believes that many of the trends observed over the past year will continue, even though something will return to normal. Horneland Kristensen points out, in particular, the way Norwegians purchase goods.
– Norwegians got a thicker wallet during the pandemic and got more in a savings account. Some of the trade will normalize, but I think e-commerce will increase and the restructuring will continue sharply.