When you have over 600 leases across the Nordics, you can't afford to lose track. That's why Normal chose to digitize everything with Complete Control from House of Control.
The Danish retail chain Normal is the empire that the Danish kingdom never had. Since the first store opened in Silkeborg in 2013, Normal has developed into a European success story – with more than 900 stores in Denmark, Norway, Sweden, the Netherlands, France, Finland, Portugal, Spain and Italy.
– Each and every store has a carefully selected location, and behind every current lease there are usually lengthy negotiations carried out by local Expansion Managers, says Søren Kring, Property Manager for the Nordic region.
For Normal, store location and lease terms are two sides of the same coin. One determines whether customers find their way, the other whether the operation can remain profitable.
– While the choice of location is crucial for the chain's turnover and growth, low rents and good terms are fundamental for us to stay true to our concept, explains Kring.
He is responsible for more than 600 leases in the Nordic region – a number that is growing in line with the expansion.
– It's a large number with strategic importance for the group. When the leases are about to expire, we have to consider each individual store: How is it performing? What is the market rent? Should we renegotiate, extend or move?
Previously, the follow-up was done in spreadsheets. This worked for as long as the chain was small, but as growth accelerated, it became difficult to manage – and risky.
– We grew so fast that we needed better overview. The risk of forgetting notifications and losing important leases simply became too great, says Kring.
The solution was Complete Control from House of Control – a SaaS solution for contract management that sends out alerts well before contracts expire. It was chosen on the basis of strong customer references and a mature, stable technology. The choice was made before Kring joined Normal.
– We primarily use the system for the function that notifies us when contracts are about to expire. Normally, we have to notify the landlord 6, 9 or 12 months in advance to exercise an extension option. If we don't notify in time, we may lose the right to extend, he says.
The notification function has proved to be absolutely crucial.
– In practice, Complete Control acts as a safety net. It ensures that we always know which contracts we need to follow up – and when. This is incredibly important, because in many cases we've negotiated lease terms that we want to keep, or possibly adjust when the contract is up for renegotiation, says Kring.
He explains that the system not only provides alerts on the screen, but also sends emails to those responsible.
– We receive automatic emails with an overview of which contracts require action in the coming quarter. This has saved us several times from overlooking a contract that was about to expire, he says.
For Normal, large sums are involved.
– The Nordic leases represent a large three-digit million amount in annual commitments, says Kring, referring to amounts in Danish kroner.
– It goes without saying that even a small error can have major consequences. If we forget to give notice in time, we risk losing a good deal. In the worst case, we lose the premises altogether.
Although House of Control is primarily used by the real estate department, several parts of Normal benefit from the solution. Other departments – such as logistics and HR – also use the system for their contracts.
– This means that we have one common place for all important agreements, regardless of whether they concern premises, transport or staffing. It provides both an overview and control, says Kring.
Although Kring finds Complete Control intuitive and user-friendly, he does need support from time to time. The collaboration works very well, he says:
– We have a dedicated Customer Success Manager who works closely with us. He gets in touch when necessary, and we get quick assistance if we want to adjust the setup. This has worked both virtually and through physical meetings at the head office.
Two years ago, Normal carried out a major update of the system, and even then they received close follow-up from House of Control.
– We find that there’s a good balance in the collaboration. When things run smoothly, it takes care of itself. When we need support, we get it quickly, says Kring.
Although Normal currently uses Complete Control mainly for contract management and notification, Kring sees room for further possibilities.
– We're considering using the system more actively as a tool in our financial and controlling work. The data we enter would benefit from being linked to our other systems, making it easier for us to follow developments in rents and KPI adjustments, he says.
– For example, if we were able to link rental expenses directly to consumer price indices or sales figures, we would have an even stronger tool for validating landlords' invoices. It's something we're looking at, especially as we expect continued growth and more stores.
For Kring, there is no doubt that Complete Control will play an important role in the chain's further expansion.
– When you grow as fast as we do, you need systems that scale with you. House of Control is an important tool for ensuring stability in the midst of growth. It gives us predictability, control, and confidence – and allows us to focus our time on what really matters in my role: negotiating the best possible terms for our stores, he concludes.