Situated in the heart of Oslo is Norway’s premier luxury destination, Promenaden. It’s home to some of the world’s leading luxury and contemporary brands, as well as the world’s oldest continuously running department store, Steen & Strøm.

In the face of unpredictable currents in the luxury market, Steen & Strøm had its best year yet in 2024, with sales rising nearly 7% above its record‑breaking performance in 2023.

But how have Norway’s iconic high-end department store and neighbouring brands defied the wider global luxury downturn? And more importantly, how are they redefining the shopping experience for discerning customers?

In the face of unpredictable currents in the luxury market, Steen & Strøm had its best-ever year in 2024

We sat down with Justin Johnston-Taki, Senior Vice President at MARK Capital Management. Since joining in 2019, Justin has played a pivotal role in asset management across the Nordics – overseeing Promenaden Management, the platform responsible for managing Promenaden. We were also thrilled to have Annette Lund, the CEO of Promenaden Management, join the discussion – who has dedicated over a decade to building and growing the company. Finally, we were joined by David Wilkinson, Executive Director at Steen & Strøm, who’s leading the revitalisation of this iconic store following stints at other world-renowned stores such as Harrods and Selfridges.

FIRSTLY, CONGRATULATIONS ON STEEN & STRØM’S INCREDIBLE PERFORMANCE LAST YEAR. CAN YOU TALK US THROUGH WHAT’S DRIVEN THIS? IT’S IMPRESSIVE CONSIDERING THE HEADWINDS CURRENTLY FACING THE LUXURY MARKET GLOBALLY.

David: Thank you! Well, Steen & Strøm’s recent performance is on the back of several years of hard work. It definitely hasn’t come overnight, and reflects a culmination of factors. The work Annette and MARK have done in creating a luxury destination in the heart of Oslo has definitely benefitted Steen & Strøm, as has the direct investment into the store. There was a $36 million renovation in 2021 that included a new entrance and store front onto Karl Johans Gate (the highest footfall retail street in the city). This renovation also included an extended beauty hall. These more asset-specific initiatives have been super important, but we’ve also benefitted from Norway’s rising international visitor appeal, new hotel development and – more recently – currency fluctuations.

Annette: Absolutely. ‘Coolcation’ is a trend and we’re seeing more visitors coming to Norway in the summer, also helped by new direct air routes from Asia and the Middle East. A widening definition of what luxury is also plays a part; luxury today is much more than products, it’s about unique experiences. Oslo is a clean, safe, walkable city with easy access to nature and unique experiences – you can have breakfast here and be on the Fjords by lunchtime. This is bringing more tourists to the city, as are new hotels. When Sommerro opened in 2022, we saw a direct impact on visitor numbers and spend across our estate.

David: We’re definitely seeing this in Steen & Strøm. Last year, our top-spending international customer came from China, with spend five times what it was in 2019.

Luxury today is much more than products, it’s about unique experiences.

IS IT DIFFICULT TO BALANCE THE PREFERENCES OF YOUR INTERNATIONAL CLIENTS WITH WHAT YOUR DOMESTIC CUSTOMERS WANT?

Annette: Through our curation I think we’ve got the balance right. Norwegians do have a unique view of luxury; they’re not ostentatious and instead value quality, craftsmanship and heritage – values that have shaped our strategy and are increasingly resonating with our international customers. The embodiment of this is in the Bjerke Watch House, Europe’s largest luxury watch house. Bjerke is a fourth-generation family run business that represents some of the best watch brands in the world. We were working for several years on potential options for the former Eger department store gallery, which also forms part of our estate, when Bjerke approached us as they wanted to enlarge their offering (they were already located on our estate on Nedre Slottsgate in a small single unit). And while the new Bjerke Watch House has specific brand spaces, the overall store experience feels very Norwegian and personal. Great craftsmanship has gone into restoring the property (constructed in the 1850’s), there are family photos and antique watches from the family’s private collection on display. It’s incredibly unique.

SO, IS PERFORMANCE SOLELY BEING DRIVEN BY INTERNATIONAL VISITORS?

Annette: They are an important customer group, but not absolutely central to our strategy. When I started in 2012, prior to MARK’s acquisition of the portfolio in 2015, the wider strategy from a retail perspective was to introduce more luxury. This was in response to growing tourism but, fundamentally, it was the affluence of our local/Norwegian customers and the fact they were under-served for luxury compared to other markets. And this continues to shape our approach. To differentiate it from other global luxury destinations, we want to ensure Promenaden feels Norwegian – which, in turn, attracts international shoppers. We are very active in curating the brand mix so there is a coherent identity for each street. Balancing international appeal with local authenticity is crucial. While we have major international brands represented, there are also the flagship stores for a number of premium Norwegian brands – such as Holzweiler and Tom Wood.

David: It’s the same approach in Steen & Strøm. The store thrives on difference and we’re always striving to differentiate the experience. It’s why we invested into the beauty hall as part of the 2021 renovation and, more recently, opened Norway’s first Tech Hall – covering 700 sqm, it includes a studio with space to host events and run kit consultations. This is attracting a creative community to the store, it’s a space that talks to the past and future of the store and the city. For example, there is an espresso bar in the Tech Hall mirroring the store’s first espresso bar in the 1930’s. It’s been highly successful. Like Annette said, the Tech Hall is connecting with our local customers, but delivers something different that is also appealing to our international clients. I feel passionately that the store needs to do more than sell products, it needs to connect with our customers – and the city has an incredible cultural heritage from which to do this.

Justin: We’re in a unique position with Steen & Strøm in that we have a direct view on how various parts of the store and brands are trading. We’re not a traditional department store in that we are not operators – rather, we lease space direct to brands and local operators linked to turnover performance. For example, the Tech Hall is managed by a Swedish operator who brings their local expertise and operational skills. The combination of minimum base rent and turnoverlinked lease agreements means we have a deeper understanding of shopper preferences. It’s been really important for our decision making; we have curated the offer in line with the market and how well occupiers are performing.

Norwegians do have a unique view of luxury; they’re not ostentatious and instead value quality, craftsmanship and heritage.

THE ACTIVE INVOLVEMENT OF MARK IN STEEN & STRØM IS UNIQUE FROM A REAL ESTATE INVESTMENT PERSPECTIVE, WHAT WAS THE ATTRACTION?

Justin: Steen & Strøm formed part of a bigger portfolio, but the rarity value of the department store backed the investment decision. It is the country’s, not just Oslo’s, department store – and now the world’s oldest. Converting Eger after COVID helped consolidate its position. Post purchase, we did have to rethink our strategy in response to market conditions and the onset of the pandemic, which meant a shift to a longer-term approach and capex investment. We had to bed down and be brave enough to invest counter-cyclically. Having a really good JV partner (Middle Eastern sovereign wealth fund) who have that longer-term view, meant we were able to do this.

This was not speculative capex; all investment was done off the back of the deal – and it has paid off. Rental tone has improved across the store (tripling in some cases), as have agreements (with upward only rent reviews on the fashion floor). We’re also seeing more brands come in direct – again, to the benefit of rental tone and, ultimately, valuations.

Without a doubt, getting involved in a department store is not easy, but part of MARK’s DNA. There is a steep learning curve, in that you have to understand operators and brand’s business models; we have a retailer mindset. In addition, it means a unique focus on design. The leasing model has meant we’re increasingly focusing on how to create a coherent visual experience – we’re currently developing design guidelines for our partners, and across the store more widely, with Sybarite. It has been really hands on and I’ve been clocking up the air miles, traveling to Oslo every 12 days since September 2019, to ensure everything is just right.

BEING LANDLORDS ON STEEN & STRØM AND THE SURROUNDING STREETS, HOW HAVE LUXURY BRANDS VIEWED THAT OWNERSHIP AND POTENTIAL INTERPLAY?

Annette: Brands see the proximity to Steen & Strøm as a benefit. The store is a symbol of the city. It’s the store of Oslo and attracts customers to the surrounding streets. We have some brands that have a standalone store in Promenaden and a concession in Steen & Strøm; both spaces speak to different customers and they see the value in both. The department store also offers a fantastic opportunity for some brands to test the Oslo market/locale before committing to a standalone store. It’s also a great space to host events and run brand launches. It forms a critical part of the Promenaden ecosystem, not just in relation to retail but also the other uses we have on the estate.