Since the start of 2013, five Stormberg franchises in Norway have closed their doors or declared bankruptcy. According to an article published by Dagens Næringsliv (DN), the leading Norwegian financial newspaper, at least one of the franchisees is accusing the Norwegian outdoor apparel company of a deliberate strategy to use them to test local markets before acquiring their failed stores.
In an interview with DN, the owner of a former Stormberg franchise, Pål Askheim, stated that after he had made the initial investments and once his store was up and running, Stormberg would introduce obstacles that made it difficult for him to reach profitability. The result was that he had to file for bankruptcy, allowing Stormberg to take over the store at a low price.
Steinar Olsen, chief executive of Stormberg, disagreed, saying that his company had done its very best in supporting struggling retailers, but in some instances had not been successful in finding the right franchisees.
Stormberg has grown rapidly in recent years and is now approaching a network of 50 stores across Norway. The rapid growth has also been realized by opening a number of independently owned Stormberg stores through franchising and other special agreements certain dealers.
There were up to 27 such stores in Norway. Last year, Stormberg suddenly changed strategy and today there are only 11 franchised stores left in the Stormberg network. Olsen explained that the company had decided last December that any new Stormberg stores would be company-owned, as some stores had been struggling with poor profitability.
In 2012, Stormberg had a total of 200 employees and a turnover of NOK 286 million Norwegian kroner (€36.6m-$48.7m), up from NOK254 million in the previous year. As we have previously reported, Stormberg made its first move into Sweden at the end of last year, opening a store there.