Online? It’s not really our top priority

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A Danish homeware chain, Tiger, is flourishing without the internet.

Shopping in an actual shop will go the same way as vinyl LPs and loose- leaf tea a niche hobby for the purists.

That’s the belief of many in the retail trade and seems to be borne out by shopping figures from this Christmas.

Total retail sales rose 1.5pc in December , according to figures from the British Retail Consortium, driven by growth of 17.8pc in online shopping. Without that strong rise, overall sales would have fallen, the trade body said.

However, one seven-year-old entrant to the British high street managed to achieve 55pc sales growth during the key Christmas shopping month with no online business at all.

Tiger, a homeware brand first started in Denmark, added five new shops in England in 2012, taking its total to 18.

It plans to add as many as eight in 2013, with demand for its cheap but good-looking products showing no signs of slowing down. All the shops are profitable.

Philip Bier, managing director, says he will be disappointed if the company does not achieve like-for-like sales growth of between 2pc and 3pc in 2013, on top of opening new shops.

“To be successful now, you need to offer good value but also a pleasant experience,” he says.

“Without both, your relevance on the high street disappears.”

He cites the success of John Lewis, which he admires very much, and Apple (NasdaqGS: AAPL - news) .

“Everyone has said that the electronics industry is finished on the high street but if you walk into an Apple store, it’s jam-packed.

"People want to go and speak to the bright youngsters who can answer their questions, and spend time in a beautiful building, and they probably end up paying more for something than they would online.”

Tiger is not competing for the same levels of spending as Apple, with most of its products costing between £1 and £3.

The company’s eclectic bestsellers range from a display frame for vinyl records to a head-massager, candles and Dutch waffle biscuits.

It does not sell large items of furniture but homeware and office goods such as kitchen utensils and storage boxes that can be carried away.

Its stores are located on busy high streets where people can pop in on their way to work.

“Very high footfall is essential for us,” Mr Bier says.

The Tiger brand has about 200 outlets around Europe, including three in Scotland. These are run by the Danish parent company.

However, in England the business is a 50-50 joint venture between Bier, who is originally from Denmark, and Tiger.

Tiger’s founder sold 70pc of his stake to private equity company EQT VI in October, and the deal completed at the start of January.

It’s too early to say how private equity ownership may change the business, says Mr Bier, but he sees no reason for slowing the pace of expansion he has undertaken since bringing the brand to England in 2005.

All of Tiger’s shops are in London and the South East (HKSE: 0726.HK - news) . Mr Bier has no plans to expand to other parts of England in the near future.

“There are 60 Tiger stores in Denmark, which has a population of 5.5m people,” he says.

“We have 18 and there are 20m people in the south-east of England. There’s capacity for at least 50 stores in this area.”

Location is critical to the success of Tiger’s shops, because of the need for a high volume of customers to buy its low-cost goods. Its high street presence is also its biggest marketing tool.

“We’re spending a lot of time looking at locations, it’s the critical decision,” says Mr Bier.

“We’re signing up to 10-year leases, so, if we get it wrong, we have a problem.”

The company does not yet have any shops in central London because of the high rents but is on local borough high streets and in shopping centres in other parts of London, such as Wandsworth, Hammersmith and Lewisham, as well as in commuter towns such as Croydon and Basingstoke.

“It’s not that I don’t think we would do well in the big northern cities or the Midlands but it would involve infrastructure investments that we don’t have to make when there’s so much to go for here,” says Mr Bier.

The company has so far funded its expansion through its profits and some borrowing, “but not much”, says Mr Bier.

As for the internet, which many British retailers are looking to as their saviour, Mr Bier does not rule out going into online sales at some point.

The company has a website where you can browse products and find out where the shops are located. However for now, high street shops offer the biggest opportunity.

“With a transaction value of, say, £7 and items which are quite bulky and fragile, the delivery becomes complicated and expensive, and it doesn’t particularly lend itself to web shopping,” says Mr Bier.

“A lot of our business is impulse shopping. People come in and think that’s a great gift or that looks fun and then they’re filling up a basket.”

Starting in the UK in 2005 means Tiger predates the current British passion for all things Scandinavian, particularly Danish TV shows, but it is capitalising on it now.

“Scandinavian design, particularly in interiors, was always considered to be desirable but expensive,” says Mr Bier.

“IKEA has done a lot to address the perception of high price, as has H&M, and I hope Tiger will, too.”