Stockmann’s efficiency programme moves forward

Oulu department store will be closed, plan to restructure support functions initiated

Helsinki, Finland, 2015-04-14 07:30 CEST (GLOBE NEWSWIRE) -- STOCKMANN plc, Company Announcement 14.4.2015 at 8:30 EET

Stockmann has chosen its strategic direction and taken the first steps to implement it. As an important part of the turnaround, Stockmann launched an efficiency programme in February 2015 with an annual cost savings target of EUR 50 million. The programme includes various measures to improve profitability and competitiveness in Stockmann’s core businesses.

Evaluating the size of the store network is an integral part of the efficiency programme. Negotiations for a new lease agreement for the Oulu department store were unsuccessful and consequently Stockmann will close down the store in early 2017 at the latest. The decision will affect all employees, currently around 230 people, in the store. Stockmann is also moving forward with the earlier announced plans and will close down the three loss-making department stores in the Mega shopping centres in Moscow by the end of 2016. These stores currently employ around 700 people in total.

As the next step in its efficiency programme, Stockmann is planning to restructure its support functions in Finland and in Russia. The aim is to improve efficiency, e.g. by simplifying and speeding up processes and reducing manual work, and developing operating practices, in order to better serve the store operations and respond to customer needs. A significant part of the cost savings is expected to be reached through personnel reductions which may affect up to 420 people in support functions in Finland and Russia during 2015 and 2016.

”Stockmann’s support functions in Finland and in Russia are today designed to serve a larger scale of operations and growth strategies. As we are focusing on our core businesses, we plan to restructure the support functions to better reflect the Group's new strategy and the current economic situation”, says CEO Per Thelin. ”The planned reductions are regrettable but necessary in order to bring Stockmann back to profit. It is our goal to make the changes in a fair and responsible way for our employees.”

Stockmann will negotiate about the planned changes with employee representatives in accordance with country-specific legal requirements. In Finland, Stockmann will start codetermination negotiations that will concern around 1 100 employees in the support functions within Stockmann Retail, Real Estate and Group Administration. The potential reduction need in Finland is at most 260 people, mainly through ending of fixed-term contracts and layoffs. The negotiations do not concern sales personnel in the continuing department stores.

Other measures to improve profitability and decrease inventories, such as focusing on selected product categories, developing cooperation models and terms with suppliers, optimising the store space, improving IT systems and establishing a new distribution centre, will continue. Information on the progress of the efficiency programme will be provided in the company's interim reports.

Further information:
Per Thelin, CEO, tel. +358 9 121 5801
Jouko Pitkänen, Director, Stockmann Retail, tel. +358 9 121 3858
Nora Malin, Director, Corporate Communications, tel. +358 9 121 3558


Per Thelin

Nasdaq Helsinki
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