11.5.2009 at 12.00
HOBBY HALL TO WITHDRAW FROM BALTIC COUNTRIES
Hobby Hall, the distance retailing company that is part of the Stockmann
Group, will discontinue its business in the Baltic countries by autumn
2009 and focus on the development of its operations in Finland.
Discontinuation of the unprofitable Baltic business is part of the ongoing
measures to improve Hobby Hall's financial performance. At the beginning
of 2010, Hobby Hall will be integrated as part of Stockmann's Department
Store Division, which will later commence its own distance retailing
operations in line with Stockmann's multichannel strategy for the
Hobby Hall has operated in Estonia since 1992, in Latvia since 2000 and in
Lithuania since 2002. Last year Hobby Hall's combined sales in the three
Baltic countries amounted to EUR 33 million, which was close to one fifth
of Hobby Hall's 2008 sales total of EUR 191 million. Hobby Hall has
engaged in both conventional catalogue sales and online sales in all of
the Baltic countries, and the company has also had a store in Tallinn.
Hobby Hall's operations in the Baltic countries have failed to achieve a
sufficient level of profitability throughout the present decade. Quick
escalation of the financial crisis in the Baltic countries has brought a
substantial deterioration in purchasing power, leading to loss-making
operations, and there are no foreseeable opportunities in the next few
years to improve the profitability of the business.
Receipt of customer orders in the Baltic countries will end on 5 July
2009, and the operations will be shut down in stages by 31 August 2009.
Owing to the discontinuation, the employment of all personnel in the
Baltic countries will be terminated. Currently Hobby Hall has 63 employees
in Estonia and 19 in Latvia. As a result of shutting down the Baltic
operations, Hobby Hall will commence co-determination talks in Finland on
making cuts amounting to 42 man-years in marketing, purchasing and
The non-recurring expenses from the closure of operations will not
significantly exceed the operating loss that would arise if the operations
were continued until the end of 2009.
Early this year, Stockmann made the decision to integrate Hobby Hall into
Stockmann's Department Store Division as from the beginning of 2010. Hobby
Hall will continue as an independent division during 2009, its objective
being to improve its profitability and prepare for the integration