Stockmann to rework its strategy and operating model – targets to reduce costs by EUR 40 million
STOCKMANN plc, Press release 30.4.2019 at 8:00 EET
Stockmann is reworking its strategy in order to strengthen the competitiveness of its department and online stores. The company will start a two-year change process which targets to position Stockmann as a fashion & style authority. Stockmann will change its fashion, beauty and home selection to be more premium and hiqh-quality, and create newness with unique and sustainable brands. The strategic actions aim at returning Stockmann Retail to a growth trajectory by 2021.
The digital acceleration remains in focus. Stockmann will continue to widen its online assortment and build new partner models in order to accelerate digital and omnichannel sales. A new marketplace will open as part of the stockmann.com store in the second quarter of 2019. Especially during the Crazy Days campaign the share of online grew rapidly, and this spring sales in the hullutpaivat.com were already on the same level as the Helsinki flagship. Significant sales growth is also targeted for the stockmann.com store.
Stockmann continues to invest in excellent customer service and inspiring shopping environments, particularly at the Helsinki Flagship. Stockmann sees market potential and demand for its premium concept in all the cities where its department stores are currently located. As part of the strategy implementation, the locations and space efficiency will be reviewed separately.
Codetermination negotiations initiated to build a new operating model
Becoming a healthy business and returning the result to profit requires significant renewal and reduction of costs. Stockmann is planning a new sustainable business model and simplified organizational structure. The aim is to combine the Stockmann Retail and Real Estate divisions and the Group’s shared functions into a new Stockmann business division. This would also provide customers with a more coherent shopping experience in all channels. As a consequence of the property divestments, the revenue and operating profit of the Real Estate division have decreased.
In order to realise the planned changes, Stockmann will start codetermination negotiations affecting approximately 1 600 employees in Finland. The aim is to reduce costs by at least EUR 40 million by spring 2021, of which a major part will already be visible in the 2020 results. The reduction in personnel costs is estimated to be less than one third of the total target and over two thirds of the total would come from other savings. The measures are expected to result in the reduction of a maximum of 160 employees in Finland. The number of salespeople in the department stores will not be reduced in the negotiations. Initiatives in the performance improvement programme that was launched at the beginning of 2019 are included in the current savings target.
Further information: Lauri Ratia, Chairman of the Board of Directors, tel. +358 50 2922 Tove Westermarck, Chief Operating Officer, tel. +358 46 8763160