CEO's review

 

CEO Jari Latvanen,  Half year financial report 2020 (24.7.2020):

The global coronavirus pandemic has had a profound impact on our business performance, but this spring’s transformation and efficiency measures have produced results. We adapted our operations in order to ensure the safety of our customers and personnel; we held Stockmann’s main campaign of the spring exclusively online and developed new services suited to the coronavirus restrictions. We also cut our costs significantly through furloughs and other cost saving measures. National restrictions limited the operations of Stockmann’s stores in the Baltic countries, and the pandemic also had a large impact on the operations of the Lindex store chain in all market areas.

In terms of revenue, we performed better than expected in March–June, especially in home and beauty categories. The amount of capital tied up in stock is lower than a year ago in both divisions, and the company’s cash reserves has been significantly strengthened. The lifting of coronavirus restrictions has increased customer flows at the Stockmann department stores and Lindex stores since late May. The strong growth in the online sales of both Stockmann and Lindex continued in the second quarter. During the first half of the year, the Stockmann division launched around 50 new brands and delivered more online store orders than throughout the whole of last year, while the growth of Lindex’s online store was 102% in the second quarter.

Our cost control measures have had a significant impact. Swift adjustment measures in both Lindex and Stockmann, combined with last year’s cost savings programme, reduced the Group’s fixed costs by about EUR 35 million compared with the previous year. We will continue to adapt our cost structure to the situation in our operating environment. The corporate restructuring of the Stockmann parent company will make it possible to renegotiate the terms of the lease agreements, with the aim of achieving a lower cost level.

The result for the first half was, however, weak, despite the recovery of the business, the strong growth in online sales and significant cost saving measures.

We will continue to develop our operations with a strong focus on the customer, upgrade our digital service channels in both divisions, continue to renew the Stockmann department stores and to bring out new brands for our customers on a regular basis.