Finland's Stockmann seeks changes to loan terms as mulls fashion chain's fate
Oct 22, 2019
Finnish retailer Stockmann said on Monday it was seeking changes to its loan conditions to “provide sufficient time” to consider whether to sell fashion chain Lindex or pursue other strategic options for its most lucrative unit.
Known for its prestigious department stores, Stockmann has struggled in recent years due to a consumer shift to online shopping, prompting cost cuts and divestments.
Stockmann, which has not reported an annual net profit since 2013, said it considers “soliciting consents from the holders” of its 85-million-euro hybrid bond, to change its conditions, a move that would allow it to pay the loan back “upon the occurrence of potential divestment of Lindex”, it said in a statement.
Stockmann first announced Lindex’s possible divestment in August and has yet to confirm it.
“One possible option is to give up Lindex and for its part it will affect overall funding of which the bond is one part,” Stockmann’s chief financial officer Pekka Vahahyyppa told Reuters.
After rapid expansion until 2013, the group has struggled to find new direction for its businesses and has had to divest several units over the years.
The retailer had invested heavily in department stores in Russia but never recovered from the ruble’s crash in 2014 and in 2018, Stockmann sold all of its remaining operations in Russia.
This year, to resolve its indebtedness, the company’s owners appointed seasoned reorganizer Lauri Ratia to chair its board and to save the 157-year-old company.
Ratia temporarily assumed an executive role after the company’s chief executive left in March and in June Stockmann said it would cut around 150 jobs in Finland as part of its goal to reduce costs by at least 40 million euros by spring of 2021.
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