Chairman's review

Chairman Lauri Ratia, Half year financial report 2019 (9.8.2019):

We have continued to work on Stockmann’s strategy during the spring and summer in order to return our retail business to a sustainable level by 2021. We are in the process of renewing our fashion, beauty and home selections and rejuvenating our stores. We are currently renovating our food store in Tallinn, and in June we announced our plan to renew the entire Jumbo department store in 2020.

The transformation programme with a target to reduce costs by at least EUR 40 million by 2021 is proceeding as planned. We expect that the savings and other measures will start to be visible towards the end of 2019.

In the second quarter, the Stockmann Group’s revenue declined mainly due to the timing of the Crazy Day’s campaign which this year was held in March in Finland. Our performance has improved towards the summer. Gross margin increased in Stockmann Retail. The online sales growth continued positively, up 22%, in the first half of the year. Our digital marketplace was opened in June, and several new Online Exclusive brands were introduced to customers at

Lindex had strong growth of 30% in the online store in the first half of 2019. Gross margin improved further due to better management of inventory and markdowns. Lindex continued its digital expansion and started cooperation with the popular Nordic fashion platform We see great potential in Lindex, and therefore the Board of Directors has decided to investigate strategic alternatives for its ownership.

I am very happy to announce that later this month our new CEO and new CFO will start at Stockmann. They will bring a wealth of experience both in consumer business and demanding transformation processes. I am sure that we will move ahead as planned under the leadership of Jari Latvanen and Pekka Vähähyyppä. After these appointments Stockmann will have a strong Management Team who together with the whole personnel will develop Stockmann to the leading fashion and style authority.