Stockmann is Finland's oldest department store, founded in 1862 when Finland was a part of Imperial Russia as a Grand Duchy. Stockmann is one of the oldest, modern, department stores also in Europe. Debenhams was founded in 1778, Harrods in 1834, John Lewis in 1864, Nordiska Kompaniet in 1902, Selfridges in 1909 and Galeries Lafayette in 1912. This makes Stockmann one of the oldest department stores in Europe. Not bad for a small Nordic country, which is now celebrating its 100 years of independence.
According to my knowledge, Stockmann is the only department store operating, which has its roots in Imperial Russia, and it did not have any touchpoints with the Soviet Union. In 1862, Helsinki had some very wealthy families, which created their wealth by doing business in Russia. Market Square and Senate Square in Helsinki are surrounded by small city palaces, which are currently in business and public use. Therefore, this was the ideal place to found a modern department store. This is the reason why some Russians love the brand. Stockmann's historical roots make it a true diamond in Europe's modern business history because it has also survived multiple recessions, wars, and ideological threats.
A Big Party After The Cold War
After the collapse of the Soviet Union and the Cold War. Stockmann took some firm steps to expand in Russia by opening department stores mainly in Saint Petersburg and Moscow. It was a wise move because western brands wanted to have a foothold in a growing market, which embraced capitalism. Stockmann created important sales channels for brands, from around the world, therefore, it played an important role by introducing new products to Russians. Stockmann also helped Zara, a Spanish fashion and accessories retailer, to open its operations in Russia, and other brands as well. During the 1990s, 2000s, and 2010s, everything was looking great, and Stockmann generated really good profits from its international operations. During the 2000s Russia's economic stability improved and the middle class was growing. Russian tourists also discovered Stockmann's iconic department store in Helsinki and other Finnish cities as well.
Stockmann Survived The World Of Madness
The global financial crisis, the Euro crisis, the crisis in Ukraine, Finland's and Russia's economic downturn, and changing consumer behaviour affected Stockmann in a very bad way. Multiple crises hitting at the same time can be very shocking. Stockmann made firm strategic shifts by concentrating on its core businesses: retail, fashion and real estate. The department store sold its stores in Russia, and these stores will be replaced by Debenhams. It is very likely that Hines, an American real estate company, will buy Nevsky Centre, a famous shopping centre in Saint Petersburg, from Stockmann. This means that Stockmann will withdraw completely from Russia but the increasing number of Russian tourists in Finland will not diminish its ties with Russians.
Back On Track And Shining Bright
From a marketing perspective, Stockmann has done big changes. The iconic department store has been refurbished step by step, and changes are brilliant. Stockmann is moving up from the centre-ground, more to the high-end because the marketplace is more polarised to the low-end and high-end. Mid-end is the worst place to be. Yesterday (15.3.2017) Stockmann opened a new department store in the City of Espoo, which is a neighbouring city to Helsinki. It is always a nice situation when you design a new department store from scratch. This also reveals how a company sees the current business environment.
Stockmann's new department store is very similar to John Lewis in Chelmsford, which is also a new department store. Tapiola store has four floors: food hall, men's fashion, women's fashion and home decor. It has a very high-end atmosphere. One of the best ones in Finland. It was delightful to see happy customers and staff, who are proud of the new department store, which has some quirky aspects. Chairman Jukka Hienonen and CEO Lauri Veijalainen have done brilliant work with their teams. I am very proud that Stockmann has survived very tough market challenges. It is a jewel in Finnish and European business history, and therefore it should have a bright future, and it does. Well done.
Published in Luxury Sales Academy.