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Home improvement and speciality goods trade

The home improvement and speciality goods trade division provides customers with selections of building and home improvement products, agriculture and machinery products and leisure goods, a highly accessible retail store network, online stores and e-services.

The home improvement and speciality goods trade operates in Finland, Sweden, Norway, Estonia, Latvia, Lithuania, Russia and Belarus. At the end of 2015, the total number of employees was 12,270.

In the building and home improvement trade, Kesko is the market leader in Finland and the fifth largest operator in Europe.

The chains of the building and home improvement trade are K-rauta, Rautia, Byggmakker, Senukai, OMA, Asko and Sotka. Rautakesko B2B Service serves large business customers in the sector. B2B sales already account for over 40% of the K-Group's sales in the building and home improvement trade.

In January 2016, Kesko announced that it had made an agreement to acquire Onninen, a company specialised in the trade of HEPAC and electrical products, thereby strengthening its position in the European building and technical trade. The completion of the acquisition is subject to the approval of the competition authorities.

The first K-rauta Express stores were opened in Helsinki and Espoo in autumn 2015. The new store concept brings building and home improvement store services to city and shopping centres. In addition to tools, the selection focuses on home improvement and decoration products, such as paints and surface materials, and particularly serves the home renovation needs of city dwellers. Customers also have K-rauta’s wide product selection available for them to order for delivery to the K-rauta Express store.

Rautakesko B2B Service updated its online services and opened a Dekostudio on Bulevardi, Helsinki in November 2015 especially to serve business customers.

Our own brands, Cello, PROF, FXA and Fiorin, provide customers of building and home improvement stores with reliable and affordable products. Cello, which comprises products for the home and garden, revised its brand look in autumn 2015. The new Cello is livelier, more emotional and more inspiring than before.

The agricultural and machinery trade comprises the operations of K-maatalous and Konekesko. In 2015, we combined the operations of the agricultural and machinery trade in one unit to improve customer experience in Finland and to benefit from synergies in customer relationship. In addition to Finland, Konekesko also operates in the Baltic countries.

The chains in the leisure goods trade are Intersport, Budget Sport and Kookenkä. Intersport Finland Oy is the market leader in the Finnish sports trade with its Intersport and Budget Sport chains and is about to introduce the international The Athlete's Foot chain into Finland.

In addition to a comprehensive store site network, customers have access to multi-channel e-services and several online stores. Customers shopping for leisure goods are served by Intersport.fi, Budgetsport.fi and Kookenka.fi. All K-rauta and Rautia stores in Finland and all K-rauta stores in Sweden, Estonia and Latvia provide a click and collect online store. Various e-services, such as home renovation planning tools, demand calculators and mobile applications, make shopping and transactions easier.

in action:
K-rauta Express brings building and home improvement store services close to customer flows

The K-rauta Express concept is based on changes in customer behaviour as a result of urbanisation and smaller family sizes, the growth in online sales, the ageing of the population and the decrease of private motoring in certain customer groups.

Work on a strategy for the building and home improvement trade resulted in the launch of a new K-rauta Express store concept, which will bring the store services closer to major customer flows in urban centres and shopping malls.

The product and service selection of K-rauta Express stores enable customers to plan and order the renovation of their home on a single visit. The selection focuses on home furnishing and decoration products, paints and tools.

Express stores have collection points for online purchases, as well as premises and a business model for planning services.

“The idea of the K-rauta Express concept is to provide urban customers with quicker, easier shopping. Customers may purchase goods on their way to work or place orders on the internet for collection. We do our utmost to make shopping fun,” says Virpi Viinikainen, Chain Director for K-rauta.

K-rauta Express stores are always satellite stores for larger K-rauta retailers. This enables the smaller store to leverage the selections, logistics and other operations of a larger K-rauta store.

The first K-rauta Express was opened in the Forum shopping centre in central Helsinki in August 2015 and the second one opened in the Sello shopping centre in Espoo in November. The concept will be tested in these stores, and further development and a decision on its expansion will be made on the basis of this trial. Development work will be based on extensive customer surveys.

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Competitive advantages in the home improvement and speciality goods trade

  • Chain concepts and service offering based on customer needs
  • Serving different customer groups with the same store network
  • Comprehensive store network and extensive e-services
  • Efficient combination of online retailing and a physical store network
  • Click and collect business model
  • Skilled customer service in stores and e-channels
  • Well-known, reliable store chains and product brands
  • Efficient sourcing and logistics
  • Internationally uniform business models

Building and home improvement trade chains

K-rauta

The international K-rauta chain offers products and services for building, renovation, yard and garden, interior decoration and furnishing to consumer, project and business customers. There are K-rauta stores in Finland, Sweden, Estonia, Latvia and Russia. All K-rauta stores in Finland are run by retailer entrepreneurs.

Rautia

Rautia serves especially builders, renovators and building professionals with the most extensive building and home improvement store network in Finland. All Rautia stores are run by retailer entrepreneurs.

Byggmakker

Byggmakker is a key building and home improvement trade operator in Norway. Its store network extends throughout the country and B2B customer expertise is extremely strong. Nearly all of the Byggmakker stores operate under a retailer business model.

Senukai

Senukai’s stores in Lithuania offer customers wide selections of non-food products with special emphasis on products related to building and living.

OMA

OMA is the largest building and home improvement store chain in Belarus.

Rautakesko B2B Service

Customers of Rautakesko B2B Service include large national and regional construction companies, property maintenance companies, customers from the house building industry and other business customers. The strength of the B2B Service is its wide selections of building and home improvement products and close cooperation with K-rauta and Rautia store networks through which warehouse deliveries are made.

Asko

Asko is the best-known and most trusted brand in the Finnish furniture and home decoration business. Asko provides quality-conscious customers with a competitive collection and the most active and reliable service in the sector. Asko has stores in Finland and Estonia, and it also runs an online store in Estonia.

Sotka

In addition to its affordable and comprehensive product selection, Sotka is known for providing an easy shopping experience for customers looking for furniture. Sotka has stores and an online store both in Finland and Estonia.  

Agricultural and machinery trade chains

K-maatalous

In Finland, agricultural customers are served by a comprehensive network of K-maatalous stores. K-maatalous retailers’ customers include agricultural entrepreneurs, machinery contractors, and equestrian professionals and enthusiasts. Many K-maatalous stores operate in connection with Rautia stores.

Konekesko

Konekesko is a machinery trade company that focuses on importing, selling and providing after-sales service for construction, materials handling, environmental and agricultural machinery, and recreational machinery. Konekesko operates in Finland, Estonia, Latvia and Lithuania. 

Leisure goods trade chains

Intersport, Intersport.fi

The Intersport chain's stores and online store provide customers with products and equipment for active sports, keeping fit and for leisure activities. 

Budget Sport, Budgetsport.fi

Budget Sport stores offer products for physical activities, outdoor sports and leisure easily and affordably. Customers are also served by the diverse Budgetsport.fi online store.

Kookenkä, Kookenka.fi

Kookenkä is Finland’s biggest speciality shoe store chain for the whole family. Kookenkä also operates an online store.

Market

The market in the building and home improvement trade by country, along with the change from the previous year (retail trade, VAT 0%)

The total market in the entire operating area of the building and home improvement trade is around €23 billion*
Finland €3.1 billion (-2.9%), (RaSi ry)
Sweden €4.3 billion (12.3%), (HUI)
Norway €4.0 billion (5.5%), (Virke)
Estonia €0.4 billion (7.0%)*
Latvia €0.4 billion (4.0%)*
Lithuania €0.5 billion (2.0%)*
Russia €9.2 billion (-6.0%), (PMR)
Belarus €1.4 billion (14.4%)*

The interior decoration items and furniture trade is worth around €1.5 billion (-0.6%) (Statistics Finland)

The agricultural and machinery trade market, along with the change from the previous year (retail trade, VAT 0%)

The agricultural trade market is worth around €2 billion and decreased from the previous year. In Finland, the total market for Konekesko’s product areas is around €1.0 billion and it decreased from the previous year. In Baltic countries, the total market for Konekesko's product areas is around €0.5 billion and it increased from the previous year.*

The speciality goods markets in Finland, along with the change from the previous year (retail trade, VAT 0%)

The sports trade is worth about €0.8 billion (6.6%), (Statistics Finland)
The shoe trade is worth about €0.3 billion (-4.0%), (TMA and Kesko’s own estimate)

* Kesko’s own estimate

Market shares

Building and home improvement trade

Finland 40% (RaSi ry). Main competitors: STARK, Kodin Terra, S-rauta and Bauhaus
Sweden 5% (HUI and Kesko's own estimate). Main competitors: Bauhaus, Byggmax, Beijer Bygg, Woody Bygghandel and XL Bygg
Norway 17% (Virke and Kesko’s own estimate). Main competitors: Monter/Optimera, Maxbo, Coop and XL Bygg
Estonia 24%*. Main competitors: Ehitus ABC, Bauhof, Espak and Bauhaus
Latvia 12%*. Main competitors: Depo DIY and Kursi
Lithuania 30%*. Main competitors: Ermitazas, Moki-Vezi and Lytarga 
Northwestern and central Russia 7%* (St. Petersburg and Moscow). Main competitors: Leroy Merlin, OBI, Castorama, Maxidom and STD Petrovich
Belarus 10%*. Main competitors: Novoselkin and Materik

Furniture trade

Asko and Sotka
Finland 23%*
Competitors: furniture stores

Agricultural trade

Finland 27%*.
Main competitors: DLA (Hankkija Oy) Turun Konekeskus/Konefarmi and Raisioagro

Machinery trade

Finland (source: Trafi)
Outboard motors** 45% (Yamaha)
Boats** 21% (Yamarin, Suvi)
Motorcycles** 21% (Yamaha)
Tractors** 9% (Massey Ferguson)
Light < 750 kg transportation trailers 15% (Muuli)

** registered

Baltic countries 20% (Kesko’s own estimate)

Sports trade

Intersport, Budget Sport and Kesport
Finland 31% (Statistics Finland and Kesko's own estimate)
Competitors: Sportia, Top Sport, Stadium, XXL Sport & Outdoor, department stores and hypermarkets and other speciality sports stores

Shoe trade

Kookenkä and Kenkäexpertti
Finland 10%*
Competitors: other speciality stores, department stores, hypermarkets, sports stores and online stores

* Kesko’s own estimate

 

in action:
Dekostudio displays products to interior decoration and furnishing professionals

Dekostudio is a new meeting place for interior decoration and furnishing professionals.

In November 2015, Kesko's building and home improvement trade division opened a meeting place for designers and architects at Bulevardi 46 in Central Helsinki. Dekostudio displays Kesko's building and home improvement trade division's interior decoration and furnishing products.

Dekostudio is intended to support the sales of Rautakesko B2B Service, the division's own brands and K-rauta and Rautia stores to B2B customers. The milieu is appealing to designers and the premises are suitable for both design work and training sessions.

”Dekostudio is a meeting point where we can display our product selection and influence B2B customers’ choice of materials in building projects at an early stage. An urban showroom with good transport links makes interior decoration products easily accessible to designers,” says Mikko Pasanen, Vice President responsible for Kesko's building and home improvement trade's sales to business customers.

The look of Dekostudio on Bulevardi differs from a building and home improvement store: its core consists of Kesko's building and home improvement trade's own imports and products from selected business partners. In addition to product displays, the premises are suitable for negotiations, design work and training events.

Kesko opened similar types of premises in Tallinn, Estonia, in February 2016.

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Strategic focus areas

Strategic objective
  • Growth in Europe to become one of the three largest operators in the building and home improvement trade
What we are doing
  • Kesko has announced that it will acquire Onninen, which specialises in the trade of HEPAC and electrical products. Like Kesko, Onninen operates in northern Europe and the Baltic Sea area, which creates an excellent platform for the growth of Kesko’s building and technical trade in Finland and the rest of Europe. The completion of the acquisition is subject to the approval of the competition authorities.
  • Baltic operations will be centralised into Senukai, the Lithuania-based subsidiary. The arrangement will enable the business in the Baltic countries and Belarus to be managed as a single entity and provide better opportunities for speeding up profitable growth. The arrangement is subject to the approval of the competition authorities.
  • In Finland, we strengthen our market position and profitability
  • Ever better service to business customers
  • We develop our digital services
  • K-rauta Express concept
  • Click and collect service at all K-rauta and Rautia stores
  • In Sweden and Norway, we continue to improve profitability and seek profitable growth
  • Click and collect service at all of the 20 K-rauta stores in Sweden
  • In Norway, nearly all stores are run by retailers
  • In Russia, we continue moderate, profitable growth in the St. Petersburg and Moscow areas
  • Profitable growth in St. Petersburg and Moscow
  • Adoption of online store and customer group specific services
  • Investments in active sales to business customers and project sales
  • We provide more extensive services to our B2B and project customers
  • We updated the online B2B Service
  • We opened a Dekostudio to serve B2B customers
  • The acquisition of Onninen will particularly strengthen our B2B sales. The completion of the acquisition is subject to the approval of the competition authorities.
  • We continue to improve the profitability of Asko and Sotka
  • We focus on the development of digital and e-services. The Sotka online store opened in 2015 and the Asko online store will open in 2016.
  • We are working on cooperation between the building and home improvement and the furniture trade to create a competitive advantage for Asko, Sotka, K-rauta and Rautia
  • Sales grew in 2015, while the costs decreased by over 3%. We will continue enhancement in 2016.
  • We improve the efficiency of the agricultural and machinery trade
  • Profitability improved in 2015; activities to ensure good development will be continued
  • We combined the operations of the agricultural and machinery trade in one unit to improve customer experience in Finland and to benefit from synergies in customer work
  • We seek efficiency in the machinery trade by working in cooperation with the same selected principals in Finland, Estonia, Latvia and Lithuania
  • We strengthen the competitiveness in the sports and shoe trade
  • The Athlete’s Foot chain will come to Finland
Home improvement and speciality goods trade in figures
NumberSales (VAT 0%),
€ million
Retail sales and number of stores2015201420152014
K-rauta*4542567560
Rautia*9396427443
Rautakesko B2B Service192187
Asko34369491
Sotka53509497
Intersport*6062194195
Budget Sport*11124641
Kookenkä*38443235
K-maatalous**8081437463
Konekesko, Finland11154150
Others***75807697
Finland, total4905042,3132,359
K-rauta, Sweden2020209197
Byggmakker, Norway8882664671
Other Nordic countries, total108102873868
Senukai, Lithuania2019328317
Asko and Sotka, Estonia*101099
K-rauta, Estonia888778
K-rauta, Latvia885253
Konekesko, Estonia4035
Konekesko, Latvia3841
Konekesko, Lithuania3824
Konekesko, Baltic countries, total116101
Baltic countries, total4645592558
K-rauta, Russia1313192250
Intersport, Russia18191215
OMA, Belarus1211116125
Russia and Belarus, total4343320390
Home improvement and speciality goods trade, outside Finland, total1971901,7851,815
Home improvement and speciality goods trade, total6876944,0984,174
* incl. online sales
** in 2015, 45 Rautia stores also operated as K-maatalous stores. In 2014, 46 Rautia stores also operated as K-maatalous stores
*** the figures include 30 (30) building and home improvement stores, 16 (16) Kenkäexpertti stores, 25 (29) Kesport stores and 4 (5) Musta Pörssi stores
Home improvement and speciality goods trade, key figures20152014
Net sales€ million3,2503,568
Operating profit€ million-57.2-52.0
Operating profit excl. non-recurring items€ million63.60.4
Operating profit excl. non-recurring items as % of net sales%2.00.0
Capital expenditure€ million5572
Capital employed€ million823941
Return on capital employed excl. non-recurring items%7.70.0
Personnel average11,26912,524
Properties20152014
Owned properties, capital€ million357441
Owned properties, area1,000 m2404474
Leased properties, lease liabilities€ million672754
Leased properties, area1,000 m21,0141,168