Today, a Finnish craft/gift retailer Tiimari announced that they are filing for bankruptcy. Reactions to these news are ranging from couldn’t-care-less to no-not-our-Tiimari and Finnish speaking Twitter is filled with opinions and links.
Naturally, I have plenty of opinions about the matter. I’m no economist but I have some sense of business and I think this situation could have been avoided quite easily. And I will try to prove my case but first, a little background:
Tiimari was founded 1975 by Kari Sulkanen in city of Lahti, and sold gifts, school supplies, and various everyday items for cheap. By 1985 it had 50 stores all over Finland and by 1990 over 100. Things were looking good. When I was a kid, Tiimari was THE place to spend my allowance at and I remember how on Saturdays, the store in Rovaniemi was PACKED with people. Who bought! Spent money! Week after week! There was ALWAYS new inventory to browse through and to want. Not only that, if you needed birthday candles, or pumice stone or what not, you knew you would find what you needed, in there.
This one I bought few months ago from a thrift store but this is an example of stuff you’d have found in Tiimari in my childhood.
On 1990 Tiimari was sold to Rautakirja, a chain of kiosks and then again on 1998 and 2006. First to CapMan Capital Management Oy and then to Leo Longlife Oyj, which both are investment groups and I think this is the time period when things started to go wrong.
Tiimari brought Hello Kitty and Kawaii-style to Finland and that’s what grew the business to such, that investment companies wanted to buy it. That and those everyday items you use and need to replace often. Founder Kari Sulkanen said on Helsingin Sanomat that he tried to offer his help on three different occasions but was rejected every time. He continued:
“They weren’t trendy. As a retailer you can’t leave products out just because you don’t feel like selling them. These are the items like coffee filters and so on. They wanted to sell pretty gifts. The real base comes from everyday items, specialties are just an add-on.”
From my experience as a re-seller, I can tell this is true. Even high-street clothing labels talk about “bread models“, t-shirts and other basic items that you use all the time and buy all the time. They are the ones that bring in the money. The more special items are there to sell the basics. The following comment from Kari confirms something I’ve thought about as a Tiimari-customer and as a consumer in general:
“Tiimari didn’t know how to make sales anymore. They bought from wholesalers when they should have been out there in the world, looking for the next new thing. Stupidly they left out the things that people have to buy every day.”
People want new things. They always have and always will. Tiimari used to be store where you went to browse and then always bought something. These days, there are always the same things in same colours. Pink, blue, lime, orange. Colours that were trendy in 2002. The inventory now is full of lame home decor items, costing up to 30 to 50 euros and that’s not something you buy on a whim anymore. When they started to expand to more specialized craft goods from the standard cardboard, pens and glues, I thought, great, it’s going to change. But no. Unreliable inventory on that part killed my shopping experience.
Current management said on Kauppalehti:
“Consumers shopping behaviours changed over the years. It’s now more about what’s necessary and the purchases are thought thoroughly.”
Explain Ikea. Explain Tiger, which is a Danish company that sells…Paper goods, gifts and everyday usable items for cheap. Does that sound any Finnish retailer you know? Blame has been also put on the general transformation of the industry, ie. online shopping, but who really buys and pays postage for 1 to 5 euro items? No one. Another point is that if you knew your customers are changing their shopping behaviour, you should have changed with them. Or in reality, they changed their inventory, alienating their loyal fan-base which in turn killed the sales. How badly has Kawaii been doing? In the past 5 to 6 years it exploded and became mainstream-style.
Tiimari was brought down by management ego that ignored the wants and needs of the average customer.
Thrifty Finn- Meaning business
P.S. A little inside gossip…In Tiimari, there are many managers, one for almost every product line. All of them think/thought that their line is the most important. Obviously that made dealing with them a nightmare because nothing got done from all the power struggles. Who pays for this? The poor sales staff on the floor who had nothing to do with any of the drama.
P.P.S. Remember in the beginning of this post, I said that Tiimari used to be packed with people? Yeah, now Tiger is packed with people who used to shop at Tiimari.