CEO's review

 

CEO Jari Latvanen,  Interim report Q3 2019 (30.10.2019):

Stockmann’s transformation process is on track. We are implementing our strategy as planned and fully focusing on developing our operations in order to offer excellent customer service and inspiring experiences. We are renewing the selections further to create newness with unique and sustainable brands and upgrading the stores to fit the needs of our defined customer groups. In particular the Tampere department store is currently undergoing a number of refurbishments to strengthen Stockmann’s position as number one source of inspiration in fashion, beauty and home.

In the third quarter, Lindex had strong sales and it improved its operating result. Sales increased in all markets. Lindex continued the roll-out of its new e-commerce platform and launched a new partnership with Boozt. Lindex also opened its first franchising store in a new market, Denmark, in October with record breaking success.

Stockmann division’s operating result improved slightly but was still negative. Revenue declined as rental income decreased due to real estate divestments and the renovation of the Delicatessen in Tallinn. In the Crazy Days campaign, which took place after the quarter in October, sales were on a par with the previous year. Sales were up by 2% in Finland, and down 8% in the Baltics. The online store had strong growth of 11%. We successfully launched the Crazy Days online store in Estonia and Latvia.

Stockmann has announced on a consent solicitation to start shortly upon the release of the January-September interim report to the current hybrid bond holders to agree to postpone the first reset date by 18 months. The postponement would give Stockmann financial flexibility and operating time in the process of the potential divestment of Lindex, and would enable the company to fully focus on implementing its current strategy.

We are heading into the last months of the year at full speed. We have a lot of interesting projects going on that will improve the customer experience, such as the renewed loyal customer programme which was launched in October. We will continue to put actions into practice while simultaneously investing heavily in the success of this year’s Christmas sales.