Building a new Stockmann
2014 was a challenging year for Stockmann. Conditions in the retail market were weak across our main geographical markets, and our profitability was significantly affected. It was nevertheless gratifying that Stockmann’s continued work on corporate social responsibility (CSR) issues in 2014 again produced great results.
In the summer, we launched our strategy reassessment process. The aim is to improve Stockmann’s long-term competitiveness and profitability. We can now see our new direction, and the first practical measures have already been taken. The core of the strategy is our enhanced customer focus: we aim to provide best-in-class service, an up-to-date mix of brands and a truly rewarding loyal customer programme.
Customer orientation also forms the basis for our CSR work: we wish to increase customer awareness of responsibility issues, offer our customers responsible products and create the best practices in the retail with systematic CSR work. We also want to continue the productive dialogue with our customers that started with the strategy work.
In order to support the new strategy, Stockmann was divided into three divisions at the beginning of 2015: Stockmann Retail, Real Estate and Fashion Chains. Stockmann Retail includes Stockmann department stores, the Academic Bookstore and Hobby Hall, plus the respective online stores. The Real Estate division comprises the properties owned by the Group in Helsinki, St Petersburg, Tallinn and Riga. Fashion Chains will concentrate on Lindex, as Seppälä is being transferred from Stockmann’s ownership to become a family business. The new structure takes better account of the different operating models of the retail and real estate businesses and the opportunities to develop profitable business. However, the reporting for 2014 still uses the divisional structure that applied during that year: the Department Store Division and the Fashion Chain Division.
As part of the measures to improve our operations, we have had to reduce the number of personnel and working hours. Increasing our operating efficiency will also be necessary in the future to secure the Group’s long-term profitable growth. The economic situation is challenging, and we are facing many difficult decisions. Changes are unavoidable, but our general principle will always be to act responsibly towards all our stakeholders. In the past few years, Stockmann’s CSR work has focused on responsibility issues in the supply chain, including improvements to working conditions in suppliers’ production facilities. The retail sector has an important role in these matters. Last year we continued our long-term work to improve the transparency of the supply chain. Following Lindex’ example and as the first Finnish company, we published on our website a list of the factories that we use to manufacture Stockmann’s own brand fashion products. Seppälä published its factory list late last year.
The decision to publish the factory list is in line with Stockmann’s long-term CSR policy. We are committed to a number of international initiatives, including the Global Compact, the Business Social Compliance Initiative and the Bangladesh Accord on Fire and Building Safety. Stockmann department stores have operated an ISO 14001 certified environmental system for ten years already, guaranteeing that we take environmental aspects into account in our operations.
2015 will continue to be a challenging year for us, but I believe that together with our staff we can turn the challenges into opportunities. We will continue our long-term work to increase the responsibility of our entire supply chain. We will also continue dialogue with our stakeholders. I wish to thank all our stakeholders for their trust and particularly our customers and staff for their commitment.
Helsinki, 18 March 2015