Stockmann sees Q4 improvement but Lindex remains a problem
Struggling Stockmann’s Performance is getting better but the firm isn’t in the clear yet as the Lindex chain owner is still facing some major challenges. One of the biggest is that Lindex operation itself as it’s still finding sales growth elusive.
So where did that leave the group in the October to December quarter? Well revenue fell, but that was perhaps not a shock given how tough that quarter was for so many fashion retailers in so many markets.
The group as a whole saw consolidated revenue falling to €315.7 million from €348 million a year earlier, but at least its comparable sales fell just a tiny 0.2%. And the gross margin rose to 56.8% from 55.8% a year ago. But adjusted operating profit was down sharply to €24.2 million from €34.9 million.
It all marked a better performance than the year as a whole when comp sales dropped 1.5%, and total consolidated revenue fell to €1.056 billion from €1.176 billion. Additionally, adjusted operating profit went into freefall, hitting €12.3 million after €30.9 million a year earlier. And a €150 million impairment charge linked to a writedown of Lindex goodwill meant it turned in a reported operating loss of a hefty €148.4 million.
Clearly, Stockmann’s turnaround is still a work in progress and the Lindex unit is something of a problem child for the business. Revenue declines in Lindex’s core markets led to a significant drop in operating profit last year but the company said the final quarter was better.
Stockmann CEO Lauri Veijalainen said the performance overall “was not satisfactory, so we have initiated firm measures to ensure its turnaround.” We’ve already heard about one element of those measures with new CEO Susanne Ehnbåge joining in August.
But the group CEO also said that Stockmann Retail and Real Estate continued to boost their figures, although the company wants to speed up their turnarounds.
And Veijalainen added that the challenging conditions mean the firm “must be able to respond more quickly to rapid changes both in the market and in customer behaviour.” The plan is to invest more heavily in digitalisation and efficiency measures.
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