Arthur van Keulen
Former Product and Marketing Manager, Howden Joinery Netherlands
Arthur is a Former Product and Marketing Manager at Howdens Joinery Netherlands, where he was responsible for growing the number of builders and curating the kitchen range selection. Howdens entered the Netherlands in 2015 and eventually left the market in late 2019 to focus entirely on France and Belgium. We’re exploring the history of Howdens in NL to help us understand the French but also wider EU opportunities for Howdens.Read moreView Profile Page
In Practise Notes
- ~80% of the market is owned by kitchen retailers in NL vs UK it's ~80% led by builders
- HWDN was performing well in NL yet management decided to close the country and focus entirely on France
- The range and kitchen taste is different in EU vs UK which could take Howdens time to learn in new countries
- Good comparison of the retail kitchen offering vs HWDN: HWDN is focused on selling via trusted builders and serving the builder with credit, availability, and good pricing
- TAM of 60 depots in NL
Disclaimer: This interview is for informational purposes only and should not be relied upon as a basis for investment decisions. In Practise is an independent publisher and all opinions expressed by guests are solely their own opinions and do not reflect the opinion of In Practise.
Arthur, can you share some context to when Howdens entered the Netherlands?
They entered around 2016, about one and a half to two years before I arrived. Obviously, there was a huge potential in the Dutch market. From what I understood, the market in the UK had matured to where much growth through volume was difficult, so it was always through price. Therefore, they were looking for pockets of growth, so they looked towards mainland Europe to see if they could expand their business there. They already had economies of scale in the UK, with regards to production, so the cost structure was relatively straightforward, as well as a big advantage.
They looked into the Netherlands, Germany and France. To give an overview, in the Netherlands, they started off with one business unit, as a headquarter and also with a direct store. In Germany, they did the same. In France, they bought a retail chain that they converted to Howdens Cuisines, so that had around 20 stores from the start. That is the difference between Germany, the Netherlands and France.
Can you describe the Netherlands market as split between DIY and trade?
If you look at the UK, the split between DIY (or Do-it-for-me) and builders is probably 80/20. This is the sense that we got from the UK market and that is why Howdens was so big in the UK. In the Netherlands, it is the other way around. That was the big window of opportunity; it was 80% retail and 20% DIY. To have standalone builders, to build kitchens, was not really being done to a large degree. The only thing you did have was IKEA, which had a quite broad base. Also, from a cost point of view, it was a big plus, as to why the Dutch population chose an IKEA kitchen. With Howdens’ cost structure, IKEA could not compete with us on price.
How much was the average IKEA kitchen in the Netherlands?
It varies because the kitchen business is always a bit smoke and mirrors. Just to give you a broad insight, we were easily able to be cheaper than IKEA. With IKEA, you still don’t have the builder and you have limited choices. You always have these compartments that are not made to measure. It’s the same if you have a walk-in closet. I made one myself and if you made one yourself or you have it done by a builder then it fits perfectly in the space that you have available. With an IKEA kitchen, you just need to work with the cabinets that they have.
I think the average order value or kitchen price, here in the UK from Howdens, is around £3,000. IKEA is probably much cheaper than that, in the Netherlands, if you are buying a simple kitchen. What is the typical price that you would pay in IKEA in the Netherlands?
I think the £3,000 you mentioned in the UK is similar to the Dutch market. At that price level, we were able to compete because price is quite a powerful tool, when looking at IKEA.
But then you had the builder construction where you offer so much service and put a smile on builder’s faces by giving them a respectable margin, at the same time, being very price competitive for the end consumer.
Going back to the point about the split of the market, you said the main channel in the Netherlands is buying from retailers, like IKEA and other kitchen retailers?
Yes; IKEA is a player but the main players are retail. I wouldn’t assume IKEA as being purely retail because it is mainly cabinets and so on. The structure that we have in the Dutch market is that retail consists of big retail chains that dominate the market. De Mandemakers Groep is, by far, the largest. They have a lot of showrooms in the Netherlands and they are quite dominant. From all kitchen buyers, probably 80% go towards the formulas that they drive.
They have their showrooms and their pre-designed kitchens. If you compare it to IKEA, the choice is always limited. I would like to step away from IKEA because it is only relevant from a price point of view. If you look at what Howdens is offering to the market and then compare it to IKEA, then you can see that IKEA’s offering is limited. Howdens’ offering is much broader. Additionally, with the retailers, you can see they have a very broad assortment. Any color, different styles; it’s all possible.
The big difference between Howdens and the retailers is, if you buy a kitchen, it will be fitted for you. You don’t have to do anything. With Howdens, the builder is going to sell you the kitchen and fit it for you. From the retailer perspective, they have large agreements with builders and they have a fixed fee to fit a kitchen. In the Dutch market, those builders want to come in and go out, as soon as possible, because they are on a fixed fee. Being one minute longer at the end consumer’s location wouldn’t really make sense to them because they already agreed on the price to be paid.