NKD Group: Value for suc­cess as a con­cept of suc­cess

The com­pe­ti­ti­on has been firm­ly under con­trol for fashion retail inge­si­son for years. Whe­ther attrac­ti­ve store loca­ti­ons or plea­sant online shop­ping, the indus­try has to come up with a lot for the cus­to­mers. With the ‘Value/Discount’ con­cept, the NKD Group has posi­tio­ned its­elf as one of the lea­ding local sup­pliers in the tex­ti­le tra­de in Cen­tral Euro­pe.

The group, foun­ded in 1962, reli­es on “Value for Money”. Today’s cus­to­mers are extre­me­ly pri­ce-con­scious, but at the same time expect high qua­li­ty. NKD ser­ves exact­ly this seg­ment. In around 1,850 stores in Ger­ma­ny, Aus­tria, Ita­ly, Slo­ve­nia and Croa­tia, NKD offers a wide ran­ge of sea­so­nal fashion, home tex­ti­les and home access­ories.

The tex­ti­le dis­coun­ter employs more than 8,200 peop­le (inclu­ding 6,400 in Ger­ma­ny) and gene­ra­ted sales of almost 700 mil­li­on euros in 2018 with an EBITDA of 45.1 mil­li­on euros. The com­pa­ny, based in Bind­lach near Bay­reuth, is mana­ged by Dr. Ulrich Hanfeld (CEO), Rüdi­ger Hart­mann (CFO), Alex­an­der Schmö­kel (CPO, Purcha­sing) and Chris­ti­an Wel­les (CSO, Sales).) Sin­ce May 2019, the NKD Group is 100 owned by TDR Capi­tal.

 

NKD Head­quar­ters in Bind­lach

 

NKD holds its ground in a dif­fi­cult mar­ket envi­ron­ment

2018 was one of the most dif­fi­cult years for tex­ti­le com­pa­nies. Over­all, the mar­ket in Ger­ma­ny has slum­ped by an average of around two per­cent. Very extre­me it caught the mid­field. Luxu­ry and dis­coun­t/va­lue-for-money, on the other hand, were able to hold their own. NKD grew slight­ly in 2018 – and thus for the fifth year in a row – against the trend. EBITDA even incre­a­sed by almost 20 per­cent year-on-year. The foun­da­ti­ons for the robust busi­ness model have been laid with the suc­cess­ful tur­naround that the com­pa­ny has com­ple­ted sin­ce 2013.
NKD has estab­lis­hed its­elf as a local sup­plier, espe­cial­ly in small and medi­um-sized cities, bene­fi­t­ing from lower ren­tal cos­ts and fewer com­pe­ti­tors, which are more likely to ope­ra­te bran­ches in lar­ger cities. The pro­duct mix of fashion, sports­we­ar, home access­ories, toys and house­hold goods as well as wee­kly new pro­ducts ensu­res a recur­ring and loy­al cli­en­te­le. The so-cal­led “con­ver­si­on rate”, i.e. the pro­por­ti­on of shop­pers who visit a shop and make a purcha­se, is abo­ve-average in the indus­try.

 

NKD Branch

 

The branch port­fo­lio is con­ti­nuous­ly opti­mi­sed and enlar­ged. Non-pro­fi­ta­ble stores will be clo­sed and new, pro­fi­ta­ble stores will be ope­ned in new loca­ti­ons. In this way, the NKD Group also achie­ves uni­que­ly high retail values in terms of area pro­fi­ta­bi­li­ty. More than 95 per­cent of all shops are now
EBIT­DA-posi­ti­ve, with an average EBITDA mar­gin of 15 per­cent of the stores. Over­all, NKD has incre­a­sed area pro­duc­ti­vi­ty by 18 per­cent sin­ce 2014.

In order to make cheap purcha­ses, NKD has ent­e­red into long-term stra­te­gic part­ners­hips with major sup­pliers. This has signi­fi­cant­ly redu­ced the cos­ts in sourcing and has had a cor­re­spon­ding impact on pro­fi­ta­bi­li­ty. When pri­cing over 7,000 items per sea­son, NKD uses Arti­fi­cial Intel­li­gence to find the right pri­ce for all pro­ducts at any time and auto­ma­ti­cal­ly. Among other things, wea­ther data are used here in order to plan spe­cial pro­mo­ti­ons in a time­ly and on-demand man­ner.
In addi­ti­on to orga­nic growth in the area, the con­ti­nuous expan­si­on of the omni-chan­nel busi­ness is an important basis for the sus­tainab­le suc­cess of NKD. The com­pre­hen­si­ve branch net­work allows NKD so-cal­led Click&Collect. Cus­to­mers order online and can pick up the orde­red goods in the shop. Cus­to­mers save the now usu­al ship­ping cos­ts of around 5 euros. Mean­while, 75 per­cent of online cus­to­mers use Click&Collect and buy addi­tio­nal­ly when they visit the store.

NKD — an acti­ve and attrac­ti­ve employ­er

In order to be able to cope with the plan­ned growth in terms of per­son­nel, NKD plans to fill several hund­red new posi­ti­ons in all are­as of the com­pa­ny in 2019. As an attrac­ti­ve employ­er and trai­ning com­pa­ny, NKD has once again dou­bled the trai­ning pla­ces for trai­nees as well as for com­mer­cial eco­no­mists. The­se are also taken over after trai­ning has been com­ple­ted.

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