jysk-ikea-alternative

How Does Jysk Make Money? Jysk’s Ikea Alternative Business Model

Jysk is a Danish retail chain selling furniture, mattresses, and home décor. The company was founded in 1979 by Lars Larsen, who opened the first Jysk store in the Danish city of Aarhus. As an eCommerce retailer, Jysk makes money by purchasing goods and selling them to customers for a profit.

History of Jysk

Jysk is a Danish retail chain selling furniture, mattresses, and home décor. 

The company was founded in 1979 by Lars Larsen, who opened the first Jysk store in the Danish city of Aarhus. After serving an apprenticeship in a drapery store and moving into the furniture business, Larsen decided he wanted to establish a bedding chain.

At the time, Larsen had practically no money. But through sheer energy and ambition, he managed to onboard several suppliers and a bank willing to fund his venture. Larsen would continue to use this small branch of the Danish Norresundby Bank until he died in 2019.

For the first 22 years of operation, Jysk was known as Jysk Sengetøjslager – Danish for “Jutlandic Bedding Store”. In Denmark, people from the Jutland Peninsula are associated with thoroughness, modesty, and honesty. Larsen sought to embody these values in his business to become a trustworthy retailer offering the best deals. 

Today, Jysk is the largest Danish multinational retailer. It operates almost 3,000 stores in 50 countries worldwide. Like many similar businesses, Jysk experienced a surge in revenue as a result of the coronavirus pandemic, earning €4.1 billion for the 2019/20 financial year.

Jysk revenue generation

As an eCommerce retailer, Jysk makes money by purchasing goods and selling them to customers for a profit.

Jysk initially differentiated itself in the competitive furniture and home décor market with its distinctive blue and white goose logo. The goose represents premium goose-down feathers, which are used in duvet covers and pillows to provide extra warmth. 

This differentiation was important to the early success of the company. Operating exclusively in Scandinavia, Jysk had access to consumers who placed a high price on a good night’s sleep. In other words, Scandinavian culture is such that most consumers do not balk at spending hundreds of euros on pillows and bedding.

Logistics and commercial proficiency

Jysk also seeks to open small stores in convenient locations strategically located to major distribution centers. This enables the company to fulfill orders more quickly and create an easy shopping experience for the customer.

Order fulfillment times have also been decreased by the company reducing its reliance on Asian-made products. This also increases profit potential as supply chain costs are minimized.

Costs have been reduced further by establishing distribution facilities in Eastern Europe, a market which it views as underserved and underdeveloped. In 2018, the company opened a facility in Bulgaria to reduce freight costs by a factor of 10 million trucking kilometers per year.

Quality control

With almost 2,500 European stores taking deliveries from distribution centers once a week, quality compliance measures ensure high standards are maintained.

Each center has inbound and outbound quality checks, with specialist staff inspecting products rigorously. Jysk also collaborates with suppliers by conducting regular factory audits and holds twice-annual assembly days where furniture is put together to validate quality.

In combination with efficient logistics, quality control increases customer satisfaction and sales generation potential.

Jysk Financing

Jysk Financing allows customers to pay for purchases over $200 in equal monthly payments with no interest for 12 months.

While there are no admin or approval fees, the company charges an annual percentage rate (APR) for missed payments or outstanding balances. This rate varies by country but is usually in the range of 30 to 40%.

Key takeaways:

  • Jysk is a Danish multinational furniture and home décor retailer. It was founded in 1979 by Lars Larsen who wanted to create a bedding chain embodying the values of Jutlandic people.
  • Jysk gained traction in the Scandinavian market by selling premium goose-down products to consumers accustomed to paying hundreds of euros. The company then spread throughout Europe with the strategic placement of Jysk stores and distribution centers. 
  • Jysk also has a focus on quality control to increase customer satisfaction and revenue. Regular audits of supplier factories and biannual assembly days ensure the company is known for quality products.

Read Next: Who Owns IKEA? IKEA Business Model, IKEA Competitors, IKEA Effect, ALDI Business Model, Tesco PESTEL Analysis.

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Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"