CEO Jari Latvanen, Interim Management Statement Q3 2020 (30.10.2020):
Stockmann Group showed strong performance in both Lindex and Stockmann divisions as a result of enhanced sales activities as well as implemented cost efficiency measures. Under the current exceptional circumstances in the operating environment, Stockmann Group performed well during the period. Despite the decline in revenue the Stockmann Group´s operating profit improved and was EUR 11.7 million and the cash amounted to EUR 132 million.
Visitor trends in the brick and mortar stores started to recover towards a normal level during the third-quarter until the changes resulting from the COVID-19 pandemic affected the business at the end of the period. The coronavirus pandemic is still the main reason for the decline in sales despite the solid growth trend in digital sales.
The third-quarter result shows that the new Stockmann Group’s strategy works well also in exceptional circumstances. The transformation is proceeding according to the renewed strategy and that the company is agile to adapt to changes in the international operating environment. Stockmann Group will continue adapting the cost structure in views of the situation in our operating environment.
Lindex continued its digital expansion and launched on Zalando. Launch of the new underwear brand called Closely in which Lindex has been a partner and an investor since the project started two years ago. As part of efforts to explore new business models and ways of prolonging the lifetime of the garments Lindex is testing second-hand sales of kids’ outerwear in some selected stores. Lindex division initiated a cost saving programme to achieve a reduction of approximately EUR 14.5 million.
Stockmann division updated its business strategy during the period according to the current situation. The target is to be able to respond to changes in the operating environment and consumer behaviour by focusing on customer relationships and loyalty, developing an omnichannel customer experience, inspiring customers in the selected categories: fashion, beauty, home, food and beverages, improving a customer-centric culture and concentrating on profitable business. Stockmann division continued renewals in several department stores during the third quarter. Stockmann’s premium position was further strengthened by adding several designer brands. Additionally a new natural cosmetics department in the Helsinki Flagship was opened. Stockmann division also launched two new collections for its own brands.
Rental negotiations for Stockmann division’s department stores will continue targeting to a lower cost level according to the current market level. Stockmann division is also continuing to renew its operations and improving efficiency in processes.
The corporate restructuring administrator’s report of Stockmann plc’s assets, liabilities and other undertakings, and on the circumstances that affect the financial position of the company and its expected development, states that the preconditions for viable business exist and a solid restructuring programme can be established. The proposal for the restructuring programme is in process and the restructuring programme draft will be filed by 11 December 2020.