The Norwegian family-owned company Varner is one of the largest fashion retailers in the Nordic region. To meet growing demands for fast, efficient, and seamless logistics—both in-store and online—Varner invested in a highly automated central warehouse in Vänersborg as early as 2016. Now, another important step is being taken as the facility is being expanded by 19,000 square meters and equipped with yet another Autostore system.
– The purpose of the expansion is to increase our capacity to meet the demands of the rapidly growing e-commerce market and to provide our customers and stores with better and faster service. “Our existing Autostore will continue to serve our stores in Norway, Sweden, Finland, Iceland, and Denmark, while the new facility will be dedicated exclusively to serving our e-commerce customers,” explains Anders Eriksson, Supply Chain Director at Varner. Anders himself has been with Varner for nearly twenty years. He began his career working with logistics, inventory management, and procurement controlling at Dressmann. In 2010, he was appointed Logistics Manager at Dressmann, and today he has advanced to the role of Supply Chain Director and member of the Group Management Team, where he reports to the company’s CEO, Marius Varner.
E-commerce Drives Logistics Automation
Varner has approximately 8,500 employees, most of whom work in the company’s approximately 1,200 stores, which carry well-known brands such as Cubus, Dressmann, Dressmann XL, Bik Bok, Carlings, Volt, Junkyard, and Levi’s Store. In addition, Varner operates six fast-growing online stores, which are playing an increasingly important role in the group’s sales. Initially, each chain’s e-commerce volume was equivalent to that of a small store. Today, e-commerce has evolved into a significant sales channel that is expected to grow substantially in the future.
“Since the pandemic, stores have returned to pre-COVID-19 levels, and e-commerce has also continued to grow, though not as rapidly as during the pandemic,” says Anders, emphasizing that omnichannel is now a given, with the goal of providing customers with a truly seamless experience regardless of which channel they’re using.
Ambitious Growth Targets
The reason behind the decision to expand and further automate the warehouse is precisely the rapid growth of e-commerce, combined with Varner’s own ambitions to further expand its e-commerce operations.
– Our owners have set ambitious goals for continued rapid growth in e-commerce sales. “Given the long lead times involved in this type of project, we had to get started early,” says Anders, noting that such rapid growth requires a flexible, reliable, and fast automation solution. By “owners,” Anders is referring to the brothers Marius, Petter, and Joakim Varner, who are said to be extremely involved and proactive in all aspects of a group characterized by a hands-on, results-oriented corporate culture.
Tripled capacity
The central warehouse in Vänersborg currently houses an Autostore facility, which will now be supplemented with another one. The total investment in construction and automation is approximately 700 million kronor and is expected to triple the existing capacity. The goal is to meet the growth in e-commerce while ensuring a reliable supply of goods and high-quality service to brick-and-mortar stores.
– Our existing Autostore serves both e-commerce and our physical stores. With the new facility, each segment will be handled by its own Autostore, which means we won’t have to prioritize one over the other—instead, our physical stores will receive the same priority as e-commerce.
Took charge of logistics
Today, logistics and the supply chain are top priorities at Varner. That hasn’t always been the case. About 12 years ago, the company embarked on a journey of improvement because it was unable to deliver its goods to stores at the desired pace.
“We were experiencing growing pains due to increasing storage volumes and goods that weren’t reaching the stores on time from our external warehouses.” “The problems this created made the company’s management realize the importance of taking control of our own logistics,” says Anders.
At that time, all retail chains managed their own logistics, their own warehouses, and their own operating procedures. In 2012, a decision was made to establish a department within Varner responsible for logistics and IT, with the aim of consolidating logistics, standardizing processes, developing a shared IT infrastructure, and thereby achieving synergies. At the same time, a central logistics function was established with about twenty employees from the group’s chains, led by Anders Eriksson.
”Logistics was a necessary evil”
– Until we began working much more actively and professionally on our logistics development, we had a procurement-driven organization where logistics was something of a necessary evil and internal logistics expertise was limited. Logistics was therefore left to various third-party providers to handle, which didn’t work out well,” notes Anders. Today, logistics development is planned for the long term to ensure profitable growth. In addition, ongoing development efforts are underway with the goal of leveraging economies of scale, increasing efficiency, and offering a high-quality delivery service to both stores and consumers.
From 14 external warehouses to one group warehouse
For the new logistics organization established in 2012, one of the main tasks was to reduce the number of external warehouses. Another was to oversee the development of the new central warehouse in Vänersborg, for which planning began the following year.
– Starting in 2012, we consolidated our warehouses, moving from 14 external third-party warehouses to six, which were eventually merged into our new central warehouse for the entire group. “The new facility began operations in May 2016 and subsequently gradually reached full capacity,” says Anders.
In June 2014, the groundbreaking ceremony took place and construction began on what was internally referred to as ”the world’s best warehouse.” Exactly two years later, the new, modern central warehouse was completed on schedule. The facility was located in Vänersborg specifically because of its geographical proximity to both Norway and the EU, as well as its proximity to the Port of Gothenburg. Fortunately, Varner acquired an additional plot of land to allow for long-term expansion, and the entire facility was built to enable cost-effective expansion.
Logistics Competence Center
The facility in Vänersborg is not just a warehouse but also a logistics competence center, which is continuously evolving as new needs arise and new supply chain skills are required. Currently, the logistics organization employs a total of 220 people, 180 of whom are full-time employees, although the number of employees fluctuates significantly over the course of a year. In addition, for the past few years there has been a project and analysis team working at the tactical level to develop logistics within the Group, as well as another team in Norway consisting of 23 people who handle inventory management for stores and e-commerce.
– We have quite a few people working on our logistics and supply chain, and a key factor for success is both automating and being able to manage the many manual tasks that will continue to exist in all warehouses for the foreseeable future. Over time, however, our skill requirements have changed somewhat. We’re now in a phase where we need more logistics employees who are analytical and who can also take data and turn it into clear, structured, and actionable plans. But that type of candidate is quite difficult to find and attract,” says Anders.
So far, Varner has not had any major problems staffing its facility with traditional warehouse personnel, which is often a challenge in Sweden’s metropolitan areas and even more so in many other countries around the world.
– We usually manage to hire the staff we need. Perhaps it’s because our facility is located in a smaller town at a convenient distance from the major cities and logistics hubs. The challenge for us is really to find good employees and build a flexible workforce that we have time to train, since our workforce essentially doubles in November and December compared to February. Working in a warehouse isn’t as easy as you might think, and human errors can easily occur even though most processes are supported by modern hardware and software. You have to pick the right items, pack them correctly, and so on, explains Anders.
Investment in Leadership Development and Talent
This fall, Varner will launch a comprehensive leadership development program, and a talent development program is planned for 2023 for employees who wish to develop their skills in logistics and warehousing.
“It’s important for us as a company and for our staff that talented and motivated employees are given the opportunity to grow as logistics professionals, production managers, specialists, and so on. When our staff has opportunities for growth and development within the company, it benefits us all,” says Anders.
High-Performance Solution
For Anders Eriksson himself, it’s a matter of keeping track of both operational and tactical matters, while at the same time moving forward with strategic issues. One of the biggest strategic logistics challenges right now is to develop and further automate the central warehouse in Vänersborg, a project being carried out in close collaboration with automation partner Swisslog.
“Since we began our collaboration with Swisslog nine years ago, we have developed a deep partnership based on professionalism, flexibility, and a focus on results. “Against that backdrop, it was a natural choice to continue this successful collaboration,” says Anders. In its initial phase, the new Autostore solution will consist of 425 robots, 250,000 bins, and 62 doors, with capacity for further expansion. In addition, new conveyor systems, more miniload cranes, and packaging machines will be added to the new, expanded facility.
“With the new automation solution, we’ll be able to process 7,500 order lines per hour in the initial phase, which will make our new Autostore solution one of the highest-performing systems ever built when it goes live in about a year,” says Anders with a proud smile.
ABOUT VARNER
Varner was founded in Oslo in 1962 by Frank Varner with the opening of the first store bearing the founder’s name. In 1967, Dressman was launched, and expansion accelerated significantly in the 1980s with the acquisition of Cubus and the launch of Carlings in 1985, continuing into the 1990s with the acquisitions of Bik Bok and Hagenfeldt. Today, Varner consists of the fashion brands Cubus, Dressman, XL, Bik Bok, Carlings, Volt, Junkyard, and Levi’s Store. Varner is a family-owned company led by the brothers Marius, Petter, and Joakim Varner.
ABOUT ANDERS ERIKSSON
Education: Bachelor of Business Administration from the School of Business, Economics and Law at the University of Gothenburg.
Career: Logistics at Michelin and Kappahl, followed by various roles at Varner.
Family: Married, with two children who are growing up.
Interests: Family, exercise, books, and a little golf.
Main rule of life: Treat others the way you would like to be treated.
Best Leadership Advice: Celebrate when things go well and give plenty of sincere praise.
