STOCKMANN plc STOCK EXCHANGE BULLETIN October 9, 2003, 8.00 a.m.
HOBBY HALL FOCUSES ON DISTANCE RETAILING AND INCREASES THE EFFICIENCY OF
The Hobby Hall Division, which is part of the Stockmann Group, will
tighten its focus on distance retailing, in which it will increase the
efficiency of logistics and product range management. The role of its
stores will be modified to support distance retailing and three stores
will be closed. The aim of the overhaul is to improve the profitability of
the division by EUR 7.5-8.5 million at the annual level. Due to the
closing of stores, personnel will be cut by about 80 people in Finland and
by about 10 people in Estonia.
The Hobby Hall Division engages in distance retailing in Finland and in
all of the Baltic countries. In addition, it has stores in Finland and
Estonia. After its relative sales margin and sales fell substantially
short of its targets, Hobby Hall's profitability has been unsatisfactory.
Last year, its operating profit was EUR 0.5 million, while it posted an
operating loss of EUR 1.7 million in the first six-month period of the
In order to develop its operations, the Hobby Hall Division will focus
more closely on distance retailing, in which it is the market leader in
Finland and all of the Baltic countries. The role of its store network
will be modified to support distance retailing and three stores will be
closed. The store in Herttoniemi, Helsinki, was closed at the beginning of
September. The operations of the stores in Espoo, Tampere and the centre
of Tallinn will end during the starting winter season. The operations of
the stores that will remain in business - on Hämeentie street in Helsinki,
Tammisto in Vantaa and Rocca al Mare in Tallinn - support distance
retailing. The share of their stock accounted for by product batches that
will be discontinued from distance retailing will grow.
The efficiency of the logistics and product range management of distance
retailing will be upgraded to measure up to the challenges of the
realigned business operations. As part of the development of business
operations, Hobby Hall will assess its opportunities for centralising its
storage functions that are presently located in both Viinikkala and
Tammisto in Vantaa in a single location - namely the Viinikkala warehouse
- by the end of 2004.
The aim of the overhaul is to improve earnings by about EUR 7.5-8.5
million at the annual level. Due to the closing of stores, personnel will
be cut by about 80 people in Finland - part of whom are part-time or
temporary employees - and by about 10 people in Estonia.
The measures geared towards improving earnings will primarily be realised
during the first months of next year. The closing of stores will, however,
burden Hobby Hall's financial result for 2003, which will be below the
earnings in the previous year and in the red. The Stockmann Group's
earnings estimate for the full year remains unchanged. The target still is
that the Group's profit before extraordinary items will be better than in
Questions will be answered by Henri Bucht, deputy managing director of
Stockmann and managing director of Hobby Hall, tel. +358 50 389 0010.