Swedish kitchen furniture group Nobia, owner of UK brand Magnet, has detailed progress on its UK market plans and ongoing developments.
According to the latest Nobia 2024 Annual and Sustainability Report, the company reaffirmed that the UK is Nobia’s largest single market in terms of sales.
“Despite the strong market presence, profitability in the UK has been unsatisfactory in recent years,” the group said. “A multi-year transformation programme is therefore being implemented there to improve profitability. The measures include cost savings, consolidation of the factory structure and changes in distribution.
“Nobia is focusing on establishing franchise stores and external partnerships, while closing some unprofitable own stores and opening a small number of new stores in key strategic locations.”
Nobia currently operates from 169 directly-owned stores through its Magnet and Gower brands, as well as one franchise store, two factories and supplying 314 builders’ merchants.
The multi-year transformation programme is currently ongoing, with the aim of significantly improving financial performance. “The programme includes a major restructuring of the business and an adjustment of the product range, with a focus on the mass premium segment, in which the opportunities for differentiation and market share growth are greatest, and a review of the distribution network,” Nobia said.
In 2023 and 2024, the restructuring phase has involved “extensive cost-cutting programmes”, a reduction in the workforce, a consolidation of factories from five to two and a harmonisation of the product portfolio.
The group added: “Kitchen stores have been given greater local autonomy and a more performance-orientated incentive system, and the brand structure has been simplified by establishing Magnet as the main brand.
“To ensure long-term competitiveness, a transformation of the distribution network was launched in 2024. Unprofitable kitchen stores are being closed, while less capital-intensive alternatives, such as franchise stores and partnerships with external market participants, for example in the professional building trade, are being established.
“At the same time, product development continues with an increased focus on design, quality and sustainability, to strengthen the customer proposition in the targeted mass premium segment.”
Back in February, Nobia reported that UK sales were flat in its most recent trading update, with growth in consumer being offset by decline in project sales.
“The weak market and consequently low production volumes and underabsorption continue to burden the gross margin,” the group said. “The cost reduction initiatives implemented earlier in the year are generating savings according to plan.”
In other news, Nobia has, following customary negotiations with the local union, decided to transfer the production of its Novart kitchen range for the Finnish market from Nastola, Finland, to Nobia’s manufacturing facility in Ølgod, Denmark, and consequently close the factory in Nastola.
The transfer will involve a one-time cost of approximately €6 million, of which €1 million is non-cash, which will be recognized in Nobia’s second-quarter 2025 results. The transfer to Ølgod is expected to be completed during 2025 and generate annual efficiencies of approximately €4 million.
“While maintaining a Nordic-based production footprint, this move is aimed at strengthening Nobia’s long-term presence and competitiveness in the Finnish kitchen market. The relocation leverages economies of scale and other advantages provided by Nobia’s Nordic supply chain network, including an improved product portfolio,” says Kristoffer Ljungfelt, President and CEO of Nobia.
