Sweden’s latest retailing sensation Thomas Lundgren is no ordinary entrepreneur: by his own admission, he is depressive, sulky, and unable to stay still. Nevertheless, with his furniture chain The One now ten years old and in profit, the formula is clearly working. Anil Bhoyrul reports.
|~|30-TheOneOpen-200.jpg|~|TOUGH: Lundgren struggled to raise money for his business venture, having been turned down by bankers.|~|Sweden’s latest retailing sensation Thomas Lundgren is no ordinary entrepreneur: by his own admission, he is depressive, sulky, and unable to stay still. Nevertheless, with his furniture chain The One now ten years old and in profit, the formula is clearly working. Anil Bhoyrul reports.
Spending an hour in the company of Thomas Lundgren is an unusual experience. Many strange things happen, bizarre comments are made, the world is saved several times over, and plans for global domination are carefully laid out. No, he doesn’t work for the United Nations. Lundgren is, according to his own business card, the “Chief Emotional Officer” of retailing giant The One.
But it takes a while to find that out. “You don’t look too well. Wait there a minute,” says Lundgren, before buzzing his phone for “Marco.” Marco soon appears, and proceeds to give me a five-minute shoulder and back massage. After that, Lundgren shows off a number of framed letters from some of the world’s biggest banks, private investors and corporate giants — all letters of rejection sent a decade ago, telling him that the idea of starting another retailer in the Middle East was either wrong, stupid, or both.
“They didn’t understand that I just had to do this. You see, I was visited in the middle of the night by an angel who told me my mission in life was to save the world. To save the world from Ikea,” he explains.
A decade on, and The One has grown to 11 stores across the Middle East. Group sales have topped US$85 million and, after years in the doldrums, profits are rolling in. Lundgren takes great pride in talking about his “family” – the 800 staff he now employs. It is, he insists, not about the battle for customers but human resources – that’s where the war in retailing will be won and lost.
And right now, he has no doubt he is winning. “A sofa is a sofa. You may not care about the quality. You may care only about the price. I can’t convince you not to go and buy a cheaper sofa somewhere else. What I hope you get is great treatment by our people. So when you come to our stores you love the atmosphere. It’s like going to the theatre. Other stores have mission statements. How boring is that? We put on a drama, a show. You are entertained, and you want to come back,” he explains.
Coming back is important for Lundgren, who has made no secret of his battle – and total contempt – for arch rival Ikea. Of course, Ikea is a multi-billion dollar world-wide conglomerate. It’s cheap and cheerful products are a hit with the masses. And with annual sales having doubled to US$30 billion in the past six years, there is no immediate sign of an Ikea melt-down. Throw in the growth of French retailer, X2L, which has seen continued regional growth in the last four years, plus Home Centre and Pan Emirates, and Lundgren really has a battle on his hands.
But he doesn’t seem too concerned. “The products are becoming more and more similar. People are copying us every day. You have a lot of stores in the UAE now which are kind of The One. And that’s great, good luck to them. But what makes a huge, huge, difference, and what they can never compete on, is our people. Companies without real value not only lose their customers they will also lose their staff,” he says, adding: “The point is I am here today, a successful company, great people. You have to dare to be different and that’s where we started today. It takes a hell of a lot to get to where we are today. What you see today is what I thought I was going to do in one year. That’s why when you are an entrepreneur, you are always naïve and stupid. You have to be. It’s too much work, it’s very painful, and if you think it’s going to take you 10 years, it’s probably going to take you 20,” he explains.
Although he happily describes himself as stupid, naïve, obsessive and sulky to the point of depression, you wouldn’t think so from his confident manner, or more importantly, his own track record. Unknown to many customers, The One was launched in the UAE – it is a Middle East furniture company run by a Swede. In the past five years, break even has turned into ever increasing profit, and there are plans for shops in Lebanon, Turkey, and Saudi Arabia. Lundgren is also in discussions with possible partners in the US, China and India.
Even his rivals privately admit that The One is no longer just another furniture retailer – it is a brand. Hence the bigger plans: “I just need to make up my mind how big I want to make this company. Part of me want to see how far I can take this company, and if I don’t do that I will probably end up very sad. But another part of me wants to keep this as a family. I don’t know what will happen in the future but we are going to do a lot of things, and they will be very irrational. You will see some strange things happening next year. I want to start hotels, and then a record company. And then other plans to follow,” he says. ||**|||~||~||~|It hasn’t always been like this. Lundgren’s journey to the top has been a roller coaster ride of success, failure, depression, arrogance and luck. He first moved to the Middle East from Sweden in 1984, living in Saudi Arabia for one year before a nine year stint in Kuwait with his new wife. Lundgren at the time worked for Ikea, helping establish it as a major world-wide brand.Until 1991 and the start of the first Gulf War.
“When the invasion came. I lost everything. The Iraqis took every single thing in my house, even photos, everything except my paintings. My friends say it’s because they do not understand art in Iraq and my enemies say it’s because they do,” he says.
Lundgren returned to Kuwait briefly after the war but was unimpressed with the state of the country and decided to move to Dubai. He says: “Then I did something really, really stupid. I decided to become a business consultant. I have no idea why. And it was a terrible idea. I would have been bankrupt within six months.”
His life changed when he got a call from the Danish embassy asking him to fly to Denmark to make a speech on how to do business in the Middle East. “And that got me thinking. I thought that yes, maybe I should have the courage to follow my own dream. And that’s how it started.”
That, however, is when things really started to become tricky. He put together a business plan to start The One, deciding he needed four partners to each cough up US$1 million. No bank or financier showed any interest in his plans to launch yet another retailer.
He explains: “It just wasn’t happening – I nearly gave up. I didn’t know at the time that if you started a business and went bankrupt you went to jail. I’m glad I didn’t know that.”
Eventually he went back with a begging bowl to two Arab businessmen he knew and persuaded them, somehow, to give him US$1 million. Another American investor threw in US$500,000. He says: “So I had two and a half rather than four, but beggars can’t be choosers. We opened my first store in Abu Dhabi and when you look at the pictures you see that it looks like Ikea. So I panicked, because I had never been a purchaser. Most of the US$2.5million went on our building and opening costs – and then just one bank lent me money towards purchasing. I was struggling. We didn’t make money. We made cash, but no money. That’s how I survived. I was working for 24 hours a day.”
The chaos continued for three years until 1998 when an electrical fire at the store appeared to be the final straw, but somehow Lundgren managed to keep going.
And gradually, losses turned to break even which turned to profit – resulting in today’s runaway success.
But bizarrely, having finally “made it,” he says he spent much of the past year in deep depression. He says: “When you get there and you are depressed. And yes, I was depressed last year because it took nine years to get there, nine years of total dedication. I was just sulking, asking myself what success is. Because when you dream about success you see it as a goal. I’ve got money, no problem. But money doesn’t make you happy. Money is only interesting when you don’t have it. When I started this company, the biggest thing that I didn’t have in my business plan was the responsibility for paying salaries. That is what killed me. I never thought about that responsibility. That killed me. The first seven years really killed me because that was hard work.”
He adds: “What I like in life is the opposites. In between is boring. Changing the world of furniture is too pretentious. You have to change the life of people. Let’s get real. If you start a company and you survive you will obviously have an impact on other people’s lives. The One touches the lives of our staff, our suppliers and our customers, and all their families on a daily basis. I have now realised this. But you don’t think about that when you start a company.”
To help overcome his depression, Lundgren changed his own job title several times last year – his business cards have included titles such as “Master of the Mix”, “Dr.. Funkenstein,” and “Anti-Gravity Manager.”
Right now though, he appears in a better mood – even bordering on happy. Next week The One will steal the limelight as the only sponsor of the Robbie Williams concert in Dubai, bringing the company great kudos.
And, continuing his mission to be different, next summer he plans to shut down all the company’s stores for a week and transport all his 800 staff to India, where they will help build a new school in a remote village.
Is he serious? “Yes, I am. It’s something I have thought about for a long time and I really want to do it. All I ask in return is that during that week when our shops are closed, and we are making no money, nobody shops at Ikea.”
At this rate, he may just achieve that. ||**||