Earlier this year, Steen & Strøm, Oslo’s luxury department store set within the city’s Promenaden fashion district, celebrated its 225th anniversary.
It was an incredible milestone for any retail property, but perhaps a particularly poignant one in the light of recent department store closures across Europe, and indeed the world.
Department stores – once the hallmark of every town and city thanks to their varied and often pragmatic selections – started to run into trouble in many locations from the beginning of the last decade. Modern retail’s inflection point was reflected in bankruptcies for major, household names including Sears, Lord & Taylor, Neiman Marcus and JCPenney.
In the UK, House of Fraser entered a company voluntary arrangement prior to a slimmed-down takeover by Mike Ashley’s Sports Direct chain, while BHS and Debenhams closed down for good.
And yet for every closure, there was a renaissance on the other side of the street. Italy’s La Rinanscente department store group poured millions into repositioning its mid-range stores as luxury outlets with high-end food and beverages (F&B) options.
In 2021, a new spin-off of the House of Fraser brand opened in Wolverhampton's Mander Centre named Frasers. It was a first of its kind in the country, featuring mostly high-end designer brands.
Several other House of Fraser stores have since been converted to the Frasers format, channelling brands such as Evans Cycles, Game and Flannels. A bidding war for Selfridges resulted in a record upturn in profits.
Although the battle to survive is far from over for many household names, the tantalising combination of luxury, compelling F&B and a certain je ne sais quoi have proved a winning formula for a number of frontrunners.
Oslo’s Steen & Strøm arguably falls into that category. Well-directed investment programmes – including a £25.7 mln spend this year alone – have enhanced its heritage architecture, created a state-of-the-art beauty hall and stunning new atrium, and a repositioned entrance onto Norway’s busiest shopping street.
Notes Annette Lund, CEO of Promendaden Management, the asset’s owner and operator: ‘Steen & Strøm is not just the best department store in Norway – it’s the only department store in the country. The asset enjoys an incredible position running the full length of a block which includes Louis Vuitton, Gucci, Valentino, Balenciaga, Mulberry and much more to come.
'Norway isn’t a big country so there’s only room for one of each of these stores. And we just keep receiving more and more enquiries from luxury brands that want to be a part of this story.’
Needless to say, Steen & Strøm has had an incredible ‘glow-up’ over the years. ‘When the department store opened in 1797, Oslo had just 9,000 inhabitants,’ says Lund. ‘The store has grown in parallel with the city. It has had several different owners – each with their own strategy about how they wanted to run it. Historically, it was run like a shopping centre rather than a department store with multiple concessions.
'The way we approached the anniversary was to regard Steen & Strøm as a mature lady who needed a new dress and a facelift. We also did a fun campaign with some of our older shoppers and employees, who got a designer makeover to reflect the message.’
Steen & Strøm anchors Oslo’s luxury fashion district, known as Promenaden, which is also managed by Lund’s team. She adds: ‘We are private equity funded – our investor partners have backed us in a significant way to drive luxury retail in Norway. We’ve also been building our team to make sure we have the right experts on our side.’
David Wilkinson joined the Promenaden team in 2020 as executive director of Steen & Strøm, vaunting an exceptional career in retail. For Wilkinson, ensuring Steen & Strøm’s bright future is about maintaining its ‘relevancy’.
‘We think it’s about differentiating sufficiently from what you can find in other aspects – such as the high street, out of town or even on the internet – and making sure that we provide a distinct offer. We also benefit from our super-central location – eight minutes from the central station – and on a natural route between many of Oslo’s tourist attractions.’
'Netflix' of department stores
He adds: ‘One of the analogies that we use quite frequently is that of becoming the Netflix of department stores. So Steen & Strøm is a wrapper, if you like, and we’re populating the inside both digitally and physically to bring customers what they want. The issues that department stores have faced particularly in recent years have been well-documented. They are capital-intensive projects and you have to reinvent the model every five-to-seven years for it to maintain its competitive advantage.’
The store’s new beauty hall reflects this passion for the new – its main brands include Fenty, a relatively new entry to the scene. Meanwhile, there are big plans to transform its upper floors in the coming months and years to meet customer demand for a host of new brands and experiences.
‘Promenaden has created so much demand from luxury names to enter the Norwegian market that we are going to reposition the second floor from modern and classic menswear into a new venue for the latest brands in luxury. We’re going to create a kind of shoe paradise. And there are big plans afoot for fashion on levels three and four. This year, our footfall is up 15% versus 2019, while our revenue is ahead on a non like-for-like basis. We’re still ambitious to do more!’
One of the hallmarks of Steen & Strøm’s success, perhaps unsurprisingly, has also been its approach to F&B. ‘F&B at Steen & Strøm is responsible for 21-25% of the stores footfall and revenue,’ Wilkinson adds. ‘There are some nuances here. Here in Norway lunchtime is quite short, so our foodhall is populated by experiences you can access quickly.
'There are nine different eateries in this space, and a grocery area which is very popular as it stocks all essentials. On top of that, we have some quite highly differentiated providers of chocolate and liquorice, and are home to the state controlled alcoholic beverage provider, with a very good wine department.'
The F&B area is contained on a basement floor, which benefitted from aa new escalator core in the latest round of refurbishments. ‘We’re also popular due to this department’s variety. We have concepts from Mexican to sushi, pizza, burgers and thai, and also have big brands like Joe and the Juice and Italian eatery Olivia, which occupies a 1,200 m2 space and is performing extremely well.’
Concludes Lund: ‘We see that Oslo is really gaining in momentum these days. It used to be seen as the smaller sister to Copenhagen and Stockholm, but that’s changing. For example, Dior is coming to Oslo before the other Nordic capitals and we think it will continue to attract new luxury brands as it goes from strength to strength.’