Thomas Lundgren, owner of the multi-million dollar The One retail empire has been forced to shut his only two stores in his native Sweden.Lundgren, who currently runs 15 The One furniture stores across the Middle East, admitted in an interview with magazine CEO Middle East that he found it impossible to make a profit from the two stores in Stockholm which shut down, one after two years and the other after three years of business.
He blamed the failure on the fact that he ran the stores remotely from his Dubai headquarters but also on the expense of running a business in Sweden.
“For the last 36 months the whole company has tried to figure out how to make our stores in Sweden work. The amount of money and energy it has drained us of is scary,” he said.
“It was too far away from our head office in Dubai – we didn’t have the depth of management to handle it from here – and our pockets should have been much deeper, foreseeing what every entrepreneur knows: everything takes longer, costs more and is much more painful than you planned.”
He claimed that the taxation system in Sweden means that, unlike in the UAE where The One stores bring in revenue of around $100 million a year, it is very difficult to make money as an entrepreneur in the country
“There’s nothing to gain out of it except great customers. Because money-wise you can’t make anything out of it.”
On his website blog he goes on to describe Sweden as “a communist country in camouflage” claiming that businesses in the country are not encouraged to grow and make a profit.
“The entire system in Sweden is not built to allow you to be an entrepreneur and to succeed, and in doing so, invest in continuous growth and create more jobs.
“Today the Swedish system is more geared towards protecting the lowest common denominator rather than helping to grow the economy and contribute to the future well-being of the next generation.”
The Swedish store closures are not the first Lundgren has faced. He was forced to close two stores in Saudi Arabia seven years ago because the franchise agreement the company had didn’t work out.
In other parts of the Middle East however Lundgren’s company is enjoying spectacular growth. The firm is expected to make half a billion dollars by 2020.
The company hopes to open another 49 stores in the next five years and to expand into India, Saudi Arabia and Oman.
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