The chairman wants to save more and earn more

“First off, tell us a bit about Aandahl.”
“We are a family-owned business. I am the fifth generation to run the company. We try to do the best we can, and we’re located in Molde with ten stores in various places.”

“Ten!!?”
“Yes, in the last five, six years, we’ve opened new stores here and there. Each store has its own unique look. All are adapted to their local environment.”

“So the stores don’t compete with each other?”
“Well, yes, since it’s wise for them to differentiate themselves. Having exactly the same product range in each store would make things less interesting.”

“Which shopping centres are you at?”
“We are at Roseby in Molde, Bølgen in Elnesvågen, at Storkaia and Futura in Kristiansund, and also at Alti Surnadal, Alti Vestnes and Alti at Kyrksæterøra.”

“Who started Aandahls? Was it your great-grandfather?”
“No, her name was Ulrikke Aandahl, and she started a yarn and textile shop in Molde in 1882. She lost her husband at sea and had to find a livelihood.”

“What is important to us at Texcon going forward is to make sure that we’re using all of our pricing agreements.”

Svein Sættem

Cutting costs

At this point, Svein Sættem has said all he wants to say about Aandahls. He would rather talk about saving and earning money.

“What is important to us at Texcon going forward is to make sure that we’re using all of our pricing agreements. At Aandahls, we were able to halve our phone expenses. We paid Telenor nearly NOK 100,000. Now with Phonero, we pay close to NOK 50,000.”

“You’d have to sell a lot of clothing to make 50,000 …”
“Yep, you’d have to sell an enormous amount. Let’s say you manage 50 per cent gross earnings in one year. It’s fairly easy to calculate down from there. You have 50 per cent at your disposal, and if 20 per cent is spent on wages and 20 per cent goes to other costs such as rent, phone bills and various other things, then you’re left with 10 per cent. But if you spend 25 per cent on wages, you’re left with only 5 per cent. And if you need 25 per cent for various expenses, you’re left with nothing.”

Money out the window

“Often when we ask members if they make use of these pricing agreements, we’re told that they have other suppliers they like better.”
“That’s like saying: ‘It doesn’t matter what mortgage rate I pay, because I really like my bank’. If you like throwing money out the window, that’s fine. But I think it’s wise to sit down and take a good look at your situation.”

“Why are so few people doing exactly that?”
“I think it’s because they feel reluctant. Most people want to maintain their daily routine – go to work, put the coffee on and do what they always do. But cutting costs is simple. It’s often just a matter of sending emails to different vendors and writing: ‘Hi, what is your price for this?’. Then you receive proposals and can compare them. And you can quickly earn back what you spent on your holiday and more by doing just that.”

“… and there is a certain risk involved in having too many goods in our warehouse.”

Svein Sættem

Plenty to save on Texcon’s agreements

“Perhaps your members don’t know which pricing agreements exist?”
“They’re on the intranet and Texcon continuously sends out information about them. There are good agreements on freight, POS systems, customer clubs and staffing solutions, accounting, auditing and consulting, people counters and store security, payment terminals and redemption agreements, IT and phone agreements, duty free, search engine optimisation, online stores, logistics, store interior and furnishings, supplies and travel. And Texcon has ensured agreements with solid suppliers who deliver quality.”

Purchased too much

“Should we talk about inventory now?”
“Yes, well you can write that we have now purchased far too many goods. So we have to go that difficult route and buy fewer goods to bring the inventory down to a decent level. This is because we’re binding a great deal of capital and there is a certain risk involved in having too many goods in our warehouse.”

“How did you end up there?”
“Well, nothing is easier than buying goods, and there are incredibly many temptations. It’s easy to lose control when purchasing. It’s easy to forget how much you spent with the previous supplier and you end up purchasing five per cent more from each one, which breaks you in the end.”

“Okay … it sounds as though you store owners are on shopping sprees when making purchases.”
“Well, you do get carried away when you see something new, and you think: ‘Wow, this is fresh. We can sell a lot of this’. So you can easily find a lot of great items. It’s like going shopping, only the numbers quickly become too high.” 

Switching suppliers

“How are you able to get this under control?”
“We need to significantly reduce our purchases. In order to do this, we must decide which suppliers to use and which ones have to go. And we have to stick to a budget.”

“You have to let go of certain suppliers?”
“Yes, if you’re going to renew yourself, you should in principle replace about 10 per cent of your suppliers during a year.”

“Replace 10 per cent. Isn’t that a lot?”
“If you only replace 5 per cent, you’ll spend 20 years changing your concept.”

“But don’t you feel a little guilty about letting a supplier down?”
“If you had a customer in your store who had to cut down on their buying due to financial problems, you wouldn’t feel irritated with that customer. He makes purchases based on his wallet, and the same goes for those of us with stores. We make purchases based on our wallets. And if we’ve had a tough year, we have to buy fewer goods. If not, things will end badly.”

“It’s a good idea to keep an eye on things and become acquainted with new suppliers.”

Svein Sættem

Renewal

“Have you had this strategy for a long time?”
“We have changed a great deal, and I think that’s wise. It’s a good idea to keep an eye on things and become acquainted with new suppliers. There are some brands you will always want, but renewal is important. I’ve even changed my hairstyle over the last ten years. I’ve changed it little by little, and I’ve gotten greyer,” laughs Sættem, before continuing.

Using Front

“We’re making purchases now in August for the spring and summer of 2025, and we’ll end the half year on 30 June. This means we will wait to determine our budget until we have the best possible overview of what we’ve sold, and at what gross profit.”

“So spending a day or two on reports in Front is a good idea?”
“Or a few evenings. Down on the floor, we’ll often say that we’ve made some good sales of a certain item or brand, but when we later check this in Front, the reports tell us otherwise.”

“Do you have any other tips?”
“Yes. When you’re ready to purchase goods, it’s wise not to submit your order immediately. Instead, take it home and run the figures until you’ve calmed down a bit. Maybe you’ve shopped for 50,000 once too often. Bring the order home with you and review it to make sure you haven’t purchased the same things from several different suppliers,” says Svein Sættem.