Nobia AB

Klarabergsviadukten 70, A5
Stockholm, SE-107 24
Sweden
Telephone: (+46 8) 440 16 00
Web site: http://www.nobia.com

Public Company
Founded:
1996
Employees: 6,100
Sales: $1.5 billion (2017)
Stock Exchanges: Nasdaq Stockholm
Ticker Symbol: OMX
NAICS: 337110 Wood Kitchen Cabinet and Countertop Manufacturing; 332215 Metal Kitchen Cookware, Utensil, Cutlery, and Flatware (except Precious) Manufacturing; 335220 Major Household Appliance Manufacturing

Nobia AB designs, manufactures, and sells kitchen fixtures, furniture, appliances, and accessories for the European and British market, although it does have a limited presence in the United States as well. The company sells both to construction contractors and to individual consumers who visit the company's showrooms. With a catalog of products largely designed for the low-priced to mid-range markets, Nobia sells its wares under a number of popular brand names, including Magnet, Rixonway, Sigdal, HTH, and Marbodal. The company offers everything from custom-designed and installed complete kitchens to individual fixtures, appliances, and parts.

STORA SPINOFF: 1996

Nobia was founded in 1996 as part of the streamlining of Stora AB, ahead of its merger with Finland's Enso, which created the forestry-products giant Stora Enso in 1998. Stora had become involved in the building products and kitchen and interior fittings markets during the late 1980s, after its acquisition of Swedish Match. That company, founded in 1917, had diversified into building materials during the 1950s. Through the 1980s Swedish Match had developed a range of diversified operations, including the manufacturing of fitted kitchens, as well as other products, such as flooring and doors.

Stora acquired Swedish Match in 1988, then split its operations into two parts, selling its lighter, matches, and tobacco businesses (which kept the Swedish Match name) in 1990. In 1993 Stora regrouped its various building materials and related operations into a single subsidiary: Stora Byggprodukter AB. That company's three main divisions were fitted kitchens, the production of doors and windows, and a wholesale building materials business.

However, the subsidiary proved to be a loss maker, as Sweden, like most of Europe, suffered the effects of a long recession during the early 1990s. Stora Byggprodukter's losses continued to mount into the middle of the decade, leading to Stora's decision to sell the operation. In 1996 the Swedish investment group Industri Kapital led a buyout of Stora Byggprodukter, which was acquired through a newly established company, Nobia AB.

COMPANY PERSPECTIVES

Our vision is “Inspiring Kitchens Made Easy.” This means that we make it easy for our customers to have an inspiring kitchen in their home. We nurture kitchen dreams and put the customer experience at the forefront.

Nobia nonetheless maintained an international profile through its portfolio of kitchen brands. These included HTH in Denmark, Marbodal in Sweden, and Sigdal in Norway. Nobia launched a new marketing effort to raise the profile of its kitchen brands in their respective markets. The company also developed a new decentralized management structure by placing each subsidiary's management in charge of ensuring profitability.

Nobia's restructuring continued into 1997, as the company streamlined its manufacturing operations. Nobia also worked on developing more-efficient production and distribution systems. The company also continued its branding activities, helping its brands grow into market leaders. By the end of the year Nobia had become a profitable business overall, with all its divisions in the black by the end of the decade.

During this period Nobia sought to increase its fitted kitchens operations. The company also began selling a number of noncore operations. Meanwhile, Nobia began seeking out acquisitions to expand its geographic reach and to establish itself as a European leader in the kitchen segment.

CONSOLIDATOR IN THE 21ST CENTURY

Nobia completed its first acquisition in 1998, buying Novart Oy, Finland's fitted kitchen leader. The addition of that company, established in 1964, gave Nobia three new brands: A la Carte, Petra, and Parma. By 1999 Nobia had committed to a new strategy based on reinventing itself as a specialist producer and distributor of fitted kitchens. As a result, the company launched the sell-off of its remaining operations, a process that was largely completed early during the first decade of the 21st century. In the meantime, Nobia sought to expand its operations beyond the Nordic market and establish itself as a leading player in the highly fragmented European kitchens market. Acquisitions were to form a major part of the group's new expansion strategy, as it positioned itself as an industry consolidator into the new century.

Nobia's acquisition drive got off to a strong start in 2000. In July of that year the group agreed to acquire Poggenpohl, based in Germany but owned by Sweden's Skanska construction group. Poggenpohl, founded in 1892, had grown into one of the best known and most respected kitchen brands, and added more than SEK 2 billion to Nobia's revenues. Other operations in Germany added that year included Pronorm Einbauküchen and Optifit Jaka Möbel. Optifit produced flat-pack kitchens, that is, kitchens delivered in kit form, which purchasers put together themselves.

Next, Nobia acquired Norway's Norema, another leading name in fitted kitchens. Norema brought Nobia a number of showrooms, as well as a strong business that supplied the construction sector. Also in 2000 Nobia bought Invita, founded in 1974 and based in Bording, Denmark. By the end of the year, Nobia's operations topped the SEK 6 billion mark.

Nobia's expanding interests led it to the United Kingdom in 2001. In that year it acquired one of the United Kingdom's leading kitchen specialists, Magnet, from Enodis, a company that manufactured catering equipment. Nobia paid £134 million for Magnet, which included its C.P. Hart bathrooms brand (later sold). The addition of Magnet helped boost Nobia's total revenues closer to the SEK 10 billion mark. By then, too, Nobia had completed its acquisition of the Swedish kitchens group Myresjökök, a company founded in 1946.

Nobia completed its divestment program in 2002. In that year the company prepared for its future expansion by going public, with a listing on the Stockholm Stock Exchange. The offering provided Industri Kapital with the opportunity to begin paring its holding in Nobia; by 2004 Industri Kapital had sold all its shares in Nobia. The sale allowed Industri Kapital to multiply its initial investment in Nobia by more than eight times. By then, too, Nobia had long since been profitable, posting profits of more than SEK 400 million on net sales of SEK 9.6 billion that year.

CONTINUING GROWTH

KEY DATES
1996:
Industri Kapital leads a buyout of Stora Byggprodukter AB from Stora AB, and renames the business as Nobia AB.
1998:
Nobia acquires Novart Oy in Finland.
2000:
The company refocuses as kitchen specialists and launches an international acquisition drive.
2002:
Nobia goes public on the Stockholm Stock Exchange.
2005:
EWE-FM in Austria is acquired.
2006:
Nobia acquires Hygena in France.
2007:
With De Mandemakers Groep, the company forms the 50-50 joint-venture Culinoma GmbH in Germany.
2014:
Nobia acquires Britain's Rixonway Kitchens.
2016:
Nobia sells its Poggenpohl Möbelwerke subsidiary.
2018:
Hans Eckerström becomes Nobia's chair.

Nobia also continued in its efforts to improve the efficiency of its operations, as part of its four-pronged strategy at the dawn of the 21st century. Nobia had already put into place the first two parts of this strategy, notably the decentralized management of its subsidiaries and the development of a multibrand and multichannel business. The third prong fell into place as the group developed its own supply chain management system, which included coordinating purchasing operations throughout its subsidiaries, as well as emphasizing the use of standardized components across its various kitchen brands.

The fourth prong of Nobia's strategy called for “profitable growth.” Toward this end, the company continued to seek new acquisitions. In 2005, for example, the company entered the Austrian market, taking over that country's EWE-FM, a leading manufacturer of fitted kitchens for that market. EWE had begun producing kitchens in 1967, developing a strong distribution network throughout Austria, before launching sales in Germany and Switzerland as well.

Next, Nobia entered France, buying that country's Hygena chain in 2006. Hygena had been created by the United Kingdom's MFI in 1983 and had grown into a leading player in the French kitchens market. Nobia paid MFI £92 million for Hygena, including its 138-store network throughout France. Nobia celebrated its 10-year anniversary that year with revenues of more than SEK 15.5 billion.

Acquisitions, however, were only one part of Nobia's profitable growth strategy. Through the middle of the first decade of the 21st century, Nobia pursued a major expansion of its retail operations. In the United Kingdom, where the company operated a total of 200 stores, Nobia announced plans to open as many as 100 new Magnet stores starting in 2007. At the same time, the group announced its intention to boost the number of Hygena stores to as many as 215 throughout France. Hygena also became the company's spearhead into the Spanish market, with the opening of four stores in Barcelona that year.

Meanwhile, the group's Poggenpohl brand, which operated 27 stores, began rolling out its own retail expansion, with several dozen stores opening by the end of the decade. This expansion program also included a number of Poggenpohl showrooms in the United States.

RECESSION AND REORGANIZATION

Nobia's effort to expand its retail network then turned to Germany. In 2007 the company joined with the Netherlands' De Mandemakers Groep to form the 50-50 joint-venture Culinoma GmbH. Nobia had long been a major supplier to De Mandemakers's operations in the Netherlands. Through Culinoma, both companies targeted expansion into the German fitted kitchen retail sector. The partnership got off to a strong start by acquiring the Asmo, Plana, and Marquardt brands. By year-end 2008 Culinoma claimed the lead in the German market, with a total of 88 stores. In the meantime, the addition of Culinoma had helped raise Nobia's total revenues to nearly SEK 16.7 billion at the end of 2007.

Fueled by acquisitions and its own organic growth, Nobia had maintained steady growth through most of the first decade of the 21st century. In 2008, however, as the impact of the global economic collapse started to be felt, Nobia's sales began slipping. The group's U.K. operations were particularly hard-hit. By the end of the year, its total revenues had slipped back by 1 percent to SEK 16 billion.

Falkenberg led the company through a series of even stronger austerity measures, closing underperforming stores and laying off personnel. Still, the company was willing to spend money if it seemed likely to attract more customers. In 2011 it launched a renovation program for the Hygena store chain. By 2012, however, when the program was completed, the European kitchen accessories market was still weak, and Nobia consolidated its manufacturing operations even further. It also sold its Optifit business group, which included the Marlin bathroom fixtures brand. Hygena's manufacturing base moved to the United Kingdom from Germany in 2013, while Nobia's Myresjokok brand was folded into the Marbodal brand catalog. The company was also reorganizing its retail store network by closing several underperforming units and buying a few new outlets in more promising markets.

BRITISH EXPANSION

By 2014 cost-cutting and reorganization had helped Nobia return to profitability. Further restructuring efforts that year included the sale of the refurbished Hygena chain and the acquisition of the U.K.-based Rixonway Kitchens, which supplied kitchen fixtures primarily for housing development contractors, for more than £30 million. Nobia continued strengthening its position in the U.K. market in 2015 by acquiring the Essex-based midrange kitchen manufacturer Commodore Kitchens and the high-end provider CIE Kitchens, which was headquartered in Kent. The company agreed to pay a combined £32 million for the companies.

The acquisitions helped Nobia improve its operating margins for 2015 and 2016. Its sales were also on the uptick during this period, moving from SEK 11.4 billion in fiscal 2014 to SEK 12.6 billion in fiscal 2016. During the last quarter of 2016 Nobia agreed to sell the subsidiary Poggenpohl Möbelwerke to the German ADCURAM Group AG for €10 million. The sale was finalized during the first quarter of 2017. Observers suggested that Nobia was retreating from the high overhead luxury kitchen sector to focus most of its resources on serving the mid- and low-range markets, which had proven more profitable in recent years.

The company spent most of 2017 beefing up its retail outlet network. In July Nobia opened a new Magnet store in London at the same time that it was overhauling the brand's website to make it more shopper friendly. In May a new Sigdal store opened in Norway, followed in September by a new HTH store in Copenhagen and another new Sigdal in Norway that November. Meanwhile, the U.K. market in which the company had invested heavily the previous year was softening, and Nobia's revenues in the territory were beginning to drop. Most of the problem was attributable to falling sales from the Magnet retail chain. In contrast, the Commodore and CIE subsidiaries, which sold directly to contractors for the most part, actually reported increased sales.

More retail outlets opened in 2018, including a new Sigdal store in Norway. There was also a change in the boardroom, when Hans Eckerström, a veteran of the consumer products industry and a former executive with the sports and outdoors product supplier Thule Group AB, replaced Tomas Billing as chair in January 2018. “We are delighted to propose Hans Eckerström as the new chairman of Nobia,” a company spokesperson announced, as quoted in Cabinet Maker. “Hans has a strong track record in value creation and is a versatile and highly accomplished businessman with strategic expertise. He also has extensive experience from consumer-related industries and consumer products, particularly from the success story of Thule, which will contribute to Nobia's development and focus in this area.”

M. L. Cohen
Updated, Chris Herzog

PRINCIPAL SUBSIDIARIES

Commodore Kitchens (UK); Nobia Svenska Kok AB; EWE Kuchen GmbH (Germany); Novart Oy (Finland); FM Kuchen GmbH (Austria); Nobia Norway A/S; Gower Furniture Ltd. (UK); Magnet Ltd. (UK); Rixonway Kitchens Ltd. (UK); Nobia Denmark A/S; Uno Form (Denmark).

PRINCIPAL COMPETITORS

ALNO AG; American Woodmark Corporation; Cleanup Corporation; Takara Standard Co., Ltd.

FURTHER READING

“Extra Stores Boost Magnet.” Cabinet Maker, February 15, 2008, 6.

“Kitchen Group to Appoint New Chairman.” Cabinet Maker, January 25, 2018.

MacCarthy, Clare. “Nobia in Deal to Buy Poggenpohl.” Financial Times, July 8, 2000.

“Nobia AB and De Mandemakers Groep Holding Acquire German Kitchen Retail Chain.” Nordic Business Report, October 12, 2007.

“Nobia AB to Establish New Store Chain in Finland.” Nordic Business Report, June 16, 2005.

“Nobia Buys Rixonway in £34m Deal.” Yorkshire Evening Post (Leeds, England), December 10, 2014.

“Swedish Kitchen Company Nobia AB Divests UK Bathroom Stores Chain CP Hart.” Nordic Business Report, December 14, 2007.

“Swedish Kitchen Company Nobia AB Reorganises Production in Denmark.” Nordic Business Report, February 11, 2009.

“UK Kitchen Market ‘Weak’ Says Nobia.” Cabinet Maker, May 3, 2017.

“UK Market Uncertain but Gains Market Share.” Cabinet Maker, April 30, 2018.