What: Steen & Strom has been identified as the Nordic Tom Thumb in the past. Not anymore.

Why it is important: The department store has been able to re-brand itself from tired midmarket location to global luxury destination in less than 5 years thanks to a strategic branding coupled with smart real estate management from the parent company, Promenaden.

Oslo, Norway's capital, has been transforming into a major luxury retail and cultural hub. This evolution was highlighted by the recent development of its waterfront area, which now boasts major attractions such as the National Museum, Munch Museum, opera house, and several trendy eateries. The swift introduction of these institutions has significantly shifted the city's image, making it a potential rival to renowned destinations like Stockholm and Copenhagen.

The heart of this transformation in luxury retail can be attributed to Promenaden's real estate strategy. Over the past decade, this local landlord, which became a division of the UK-based real estate developer Mark in 2015, has been redefining Oslo's luxury retail sector. With its ownership of premier luxury locations, including the historic Steen & Strøm department store, Promenaden has established a luxury quarter in Oslo that is now drawing affluent international tourists.

One of the major factors contributing to Oslo's emergence as a luxury destination is the high purchasing power of the average Norwegian, coupled with taxes on items bought outside the country. Promenaden's strategic approach has filled this previously overlooked market with major luxury brands such as Louis Vuitton, Hermès, Burberry, Dior, and Chanel. Moreover, upscale auto brands like Lucid and Nio have also set up shops in the city.

Despite the success of Promenaden's luxury district, space has become limited. To address this, Promenaden is expanding the luxury area with additions like the Eger site, which will feature Europe's largest watch store, Urmaker Bjerke. Furthermore, the Steen & Strøm department store is undergoing a $36 million refurbishment, emphasizing both international and local brands.

Economic incentives, like a tax on luxury items bought outside Norway and re-introduced into the country, play a role in driving domestic luxury sales. The city's evolving cultural appeal and luxury retail scene are positioning it as a unique destination for affluent global travelers. While Norway might be known for its high costs, its burgeoning luxury market and cultural offerings make it a compelling destination that the global elite might find hard to overlook.

Oslo represents a new Nordic luxury destination